Modelling A.I. in Economics

DECAU Denali Capital Acquisition Corp. Unit (Forecast)

Outlook: Denali Capital Acquisition Corp. Unit assigned short-term Ba3 & long-term B1 forecasted stock rating.
Dominant Strategy : Hold
Time series to forecast n: 15 Dec 2022 for (n+8 weeks)
Methodology : Modular Neural Network (Market Volatility Analysis)

Abstract

Stock market predictions are one of the challenging tasks for financial investors across the globe. This challenge is due to the uncertainty and volatility of the stock prices in the market. Due to technology and globalization of business and financial markets it is important to predict the stock prices more quickly and accurately. Last few years there has been much improvement in the field of Neural Network (NN) applications in business and financial markets. Artificial Neural Network (ANN) methods are mostly implemented and play a vital role in decision making for stock market predictions.(Kim, S., Ku, S., Chang, W. and Song, J.W., 2020. Predicting the direction of US stock prices using effective transfer entropy and machine learning techniques. IEEE Access, 8, pp.111660-111682.) We evaluate Denali Capital Acquisition Corp. Unit prediction models with Modular Neural Network (Market Volatility Analysis) and Ridge Regression1,2,3,4 and conclude that the DECAU stock is predictable in the short/long term. According to price forecasts for (n+8 weeks) period, the dominant strategy among neural network is: Hold

Key Points

  1. Trading Interaction
  2. Can machine learning predict?
  3. What are main components of Markov decision process?

DECAU Target Price Prediction Modeling Methodology

We consider Denali Capital Acquisition Corp. Unit Decision Process with Modular Neural Network (Market Volatility Analysis) where A is the set of discrete actions of DECAU 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(Ridge Regression)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) R = 1 0 0 0 1 0 0 0 1

n:Time series to forecast

p:Price signals of DECAU 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?

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

Sample Set: Neural Network
Stock/Index: DECAU Denali Capital Acquisition Corp. Unit
Time series to forecast n: 15 Dec 2022 for (n+8 weeks)

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

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 Denali Capital Acquisition Corp. Unit

  1. A firm commitment to acquire a business in a business combination cannot be a hedged item, except for foreign currency risk, because the other risks being hedged cannot be specifically identified and measured. Those other risks are general business risks.
  2. When using historical credit loss experience in estimating expected credit losses, it is important that information about historical credit loss rates is applied to groups that are defined in a manner that is consistent with the groups for which the historical credit loss rates were observed. Consequently, the method used shall enable each group of financial assets to be associated with information about past credit loss experience in groups of financial assets with similar risk characteristics and with relevant observable data that reflects current conditions.
  3. To the extent that a transfer of a financial asset does not qualify for derecognition, the transferee does not recognise the transferred asset as its asset. The transferee derecognises the cash or other consideration paid and recognises a receivable from the transferor. If the transferor has both a right and an obligation to reacquire control of the entire transferred asset for a fixed amount (such as under a repurchase agreement), the transferee may measure its receivable at amortised cost if it meets the criteria in paragraph 4.1.2.
  4. Paragraph 5.5.4 requires that lifetime expected credit losses are recognised on all financial instruments for which there has been significant increases in credit risk since initial recognition. In order to meet this objective, if an entity is not able to group financial instruments for which the credit risk is considered to have increased significantly since initial recognition based on shared credit risk characteristics, the entity should recognise lifetime expected credit losses on a portion of the financial assets for which credit risk is deemed to have increased significantly. The aggregation of financial instruments to assess whether there are changes in credit risk on a collective basis may change over time as new information becomes available on groups of, or individual, financial instruments.

*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

Denali Capital Acquisition Corp. Unit assigned short-term Ba3 & long-term B1 forecasted stock rating. We evaluate the prediction models Modular Neural Network (Market Volatility Analysis) with Ridge Regression1,2,3,4 and conclude that the DECAU stock is predictable in the short/long term. According to price forecasts for (n+8 weeks) period, the dominant strategy among neural network is: Hold

Financial State Forecast for DECAU Denali Capital Acquisition Corp. Unit Options & Futures

Rating Short-Term Long-Term Senior
Outlook*Ba3B1
Operational Risk 8558
Market Risk5881
Technical Analysis6882
Fundamental Analysis3034
Risk Unsystematic8547

Prediction Confidence Score

Trust metric by Neural Network: 79 out of 100 with 491 signals.

References

  1. Knox SW. 2018. Machine Learning: A Concise Introduction. Hoboken, NJ: Wiley
  2. D. S. Bernstein, S. Zilberstein, and N. Immerman. The complexity of decentralized control of Markov Decision Processes. In UAI '00: Proceedings of the 16th Conference in Uncertainty in Artificial Intelligence, Stanford University, Stanford, California, USA, June 30 - July 3, 2000, pages 32–37, 2000.
  3. Breiman L. 1993. Better subset selection using the non-negative garotte. Tech. Rep., Univ. Calif., Berkeley
  4. D. Bertsekas. Min common/max crossing duality: A geometric view of conjugacy in convex optimization. Lab. for Information and Decision Systems, MIT, Tech. Rep. Report LIDS-P-2796, 2009
  5. Greene WH. 2000. Econometric Analysis. Upper Saddle River, N J: Prentice Hall. 4th ed.
  6. Canova, F. B. E. Hansen (1995), "Are seasonal patterns constant over time? A test for seasonal stability," Journal of Business and Economic Statistics, 13, 237–252.
  7. Rosenbaum PR, Rubin DB. 1983. The central role of the propensity score in observational studies for causal effects. Biometrika 70:41–55
Frequently Asked QuestionsQ: What is the prediction methodology for DECAU stock?
A: DECAU stock prediction methodology: We evaluate the prediction models Modular Neural Network (Market Volatility Analysis) and Ridge Regression
Q: Is DECAU stock a buy or sell?
A: The dominant strategy among neural network is to Hold DECAU Stock.
Q: Is Denali Capital Acquisition Corp. Unit stock a good investment?
A: The consensus rating for Denali Capital Acquisition Corp. Unit is Hold and assigned short-term Ba3 & long-term B1 forecasted stock rating.
Q: What is the consensus rating of DECAU stock?
A: The consensus rating for DECAU is Hold.
Q: What is the prediction period for DECAU stock?
A: The prediction period for DECAU is (n+8 weeks)

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