Modelling A.I. in Economics

COF Capital One Financial Corporation Common Stock (Forecast)

Outlook: Capital One Financial Corporation Common Stock assigned short-term B3 & long-term B1 forecasted stock rating.
Dominant Strategy : Sell
Time series to forecast n: 14 Dec 2022 for (n+8 weeks)
Methodology : Modular Neural Network (Market Volatility Analysis)

Abstract

The success of portfolio construction depends primarily on the future performance of stock markets. Recent developments in machine learning have brought significant opportunities to incorporate prediction theory into portfolio selection. However, many studies show that a single prediction model is insufficient to achieve very accurate predictions and affluent returns. In this paper, a novel portfolio construction approach is developed using a hybrid model based on machine learning for stock prediction.(Adebiyi, A.A., Ayo, C.K., Adebiyi, M. and Otokiti, S.O., 2012. Stock price prediction using neural network with hybridized market indicators. Journal of Emerging Trends in Computing and Information Sciences, 3(1).) We evaluate Capital One Financial Corporation Common Stock prediction models with Modular Neural Network (Market Volatility Analysis) and Wilcoxon Sign-Rank Test1,2,3,4 and conclude that the COF stock is predictable in the short/long term. According to price forecasts for (n+8 weeks) period, the dominant strategy among neural network is: Sell

Key Points

  1. Trust metric by Neural Network
  2. Investment Risk
  3. What are the most successful trading algorithms?

COF Target Price Prediction Modeling Methodology

We consider Capital One Financial Corporation Common Stock Decision Process with Modular Neural Network (Market Volatility Analysis) where A is the set of discrete actions of COF stock holders, F is the set of discrete states, P : S × F × S → R is the transition probability distribution, R : S × F → R is the reaction function, and γ ∈ [0, 1] is a move factor for expectation.1,2,3,4


F(Wilcoxon Sign-Rank Test)5,6,7= p a 1 p a 2 p 1 n p j 1 p j 2 p j n p k 1 p k 2 p k n p n 1 p n 2 p n n X R(Modular Neural Network (Market Volatility Analysis)) X S(n):→ (n+8 weeks) e x rx

n:Time series to forecast

p:Price signals of COF stock

j:Nash equilibria (Neural Network)

k:Dominated move

a:Best response for target price

 

For further technical information as per how our model work we invite you to visit the article below: 

How do AC Investment Research machine learning (predictive) algorithms actually work?

COF Stock Forecast (Buy or Sell) for (n+8 weeks)

Sample Set: Neural Network
Stock/Index: COF Capital One Financial Corporation Common Stock
Time series to forecast n: 14 Dec 2022 for (n+8 weeks)

According to price forecasts for (n+8 weeks) period, the dominant strategy among neural network is: Sell

X axis: *Likelihood% (The higher the percentage value, the more likely the event will occur.)

Y axis: *Potential Impact% (The higher the percentage value, the more likely the price will deviate.)

Z axis (Grey to Black): *Technical Analysis%

Adjusted IFRS* Prediction Methods for Capital One Financial Corporation Common Stock

  1. For the purposes of the transition provisions in paragraphs 7.2.1, 7.2.3–7.2.28 and 7.3.2, the date of initial application is the date when an entity first applies those requirements of this Standard and must be the beginning of a reporting period after the issue of this Standard. Depending on the entity's chosen approach to applying IFRS 9, the transition can involve one or more than one date of initial application for different requirements.
  2. The underlying pool must contain one or more instruments that have contractual cash flows that are solely payments of principal and interest on the principal amount outstanding
  3. The accounting for the forward element of forward contracts in accordance with paragraph 6.5.16 applies only to the extent that the forward element relates to the hedged item (aligned forward element). The forward element of a forward contract relates to the hedged item if the critical terms of the forward contract (such as the nominal amount, life and underlying) are aligned with the hedged item. Hence, if the critical terms of the forward contract and the hedged item are not fully aligned, an entity shall determine the aligned forward element, ie how much of the forward element included in the forward contract (actual forward element) relates to the hedged item (and therefore should be treated in accordance with paragraph 6.5.16). An entity determines the aligned forward element using the valuation of the forward contract that would have critical terms that perfectly match the hedged item.
  4. For the purposes of the transition provisions in paragraphs 7.2.1, 7.2.3–7.2.28 and 7.3.2, the date of initial application is the date when an entity first applies those requirements of this Standard and must be the beginning of a reporting period after the issue of this Standard. Depending on the entity's chosen approach to applying IFRS 9, the transition can involve one or more than one date of initial application for different requirements.

*International Financial Reporting Standards (IFRS) are a set of accounting rules for the financial statements of public companies that are intended to make them consistent, transparent, and easily comparable around the world.

Conclusions

Capital One Financial Corporation Common Stock assigned short-term B3 & long-term B1 forecasted stock rating. We evaluate the prediction models Modular Neural Network (Market Volatility Analysis) with Wilcoxon Sign-Rank Test1,2,3,4 and conclude that the COF stock is predictable in the short/long term. According to price forecasts for (n+8 weeks) period, the dominant strategy among neural network is: Sell

Financial State Forecast for COF Capital One Financial Corporation Common Stock Options & Futures

Rating Short-Term Long-Term Senior
Outlook*B3B1
Operational Risk 6973
Market Risk4460
Technical Analysis5555
Fundamental Analysis3041
Risk Unsystematic3659

Prediction Confidence Score

Trust metric by Neural Network: 89 out of 100 with 615 signals.

References

  1. M. Colby, T. Duchow-Pressley, J. J. Chung, and K. Tumer. Local approximation of difference evaluation functions. In Proceedings of the Fifteenth International Joint Conference on Autonomous Agents and Multiagent Systems, Singapore, May 2016
  2. Y. Chow and M. Ghavamzadeh. Algorithms for CVaR optimization in MDPs. In Advances in Neural Infor- mation Processing Systems, pages 3509–3517, 2014.
  3. M. L. Littman. Friend-or-foe q-learning in general-sum games. In Proceedings of the Eighteenth International Conference on Machine Learning (ICML 2001), Williams College, Williamstown, MA, USA, June 28 - July 1, 2001, pages 322–328, 2001
  4. Imbens G, Wooldridge J. 2009. Recent developments in the econometrics of program evaluation. J. Econ. Lit. 47:5–86
  5. J. Harb and D. Precup. Investigating recurrence and eligibility traces in deep Q-networks. In Deep Reinforcement Learning Workshop, NIPS 2016, Barcelona, Spain, 2016.
  6. Chamberlain G. 2000. Econometrics and decision theory. J. Econom. 95:255–83
  7. Clements, M. P. D. F. Hendry (1995), "Forecasting in cointegrated systems," Journal of Applied Econometrics, 10, 127–146.
Frequently Asked QuestionsQ: What is the prediction methodology for COF stock?
A: COF stock prediction methodology: We evaluate the prediction models Modular Neural Network (Market Volatility Analysis) and Wilcoxon Sign-Rank Test
Q: Is COF stock a buy or sell?
A: The dominant strategy among neural network is to Sell COF Stock.
Q: Is Capital One Financial Corporation Common Stock stock a good investment?
A: The consensus rating for Capital One Financial Corporation Common Stock is Sell and assigned short-term B3 & long-term B1 forecasted stock rating.
Q: What is the consensus rating of COF stock?
A: The consensus rating for COF is Sell.
Q: What is the prediction period for COF stock?
A: The prediction period for COF is (n+8 weeks)

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