AC Investment Research

DRD DRDGOLD Limited American Depositary Shares Research Report

Outlook: DRDGOLD Limited American Depositary Shares assigned short-term Ba1 & long-term Ba1 estimated rating.
Dominant Strategy : Hold
Time series to forecast n: 28 Dec 2022 for (n+6 month)
Methodology : Transductive Learning (ML)

Abstract

Recently, there has been a surge of interest in the use of machine learning to help aid in the accurate predictions of financial markets. Despite the exciting advances in this cross-section of finance and AI, many of the current approaches are limited to using technical analysis to capture historical trends of each stock price and thus limited to certain experimental setups to obtain good prediction results. On the other hand, professional investors additionally use their rich knowledge of inter-market and inter-company relations to map the connectivity of companies and events, and use this map to make better market predictions. For instance, they would predict the movement of a certain company's stock price based not only on its former stock price trends but also on the performance of its suppliers or customers, the overall industry, macroeconomic factors and trade policies. This paper investigates the effectiveness of work at the intersection of market predictions and graph neural networks, which hold the potential to mimic the ways in which investors make decisions by incorporating company knowledge graphs directly into the predictive model.(Beg, M.O., Awan, M.N. and Ali, S.S., 2019. Algorithmic machine learning for prediction of stock prices. In FinTech as a Disruptive Technology for Financial Institutions (pp. 142-169). IGI Global.) We evaluate DRDGOLD Limited American Depositary Shares prediction models with Transductive Learning (ML) and Multiple Regression1,2,3,4 and conclude that the DRD stock is predictable in the short/long term. According to price forecasts for (n+6 month) period, the dominant strategy among neural network is: Hold

Key Points

  1. Prediction Modeling
  2. Can statistics predict the future?
  3. Trading Interaction

DRD Target Price Prediction Modeling Methodology

We consider DRDGOLD Limited American Depositary Shares Decision Process with Transductive Learning (ML) where A is the set of discrete actions of DRD 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(Multiple 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(Transductive Learning (ML)) X S(n):→ (n+6 month) i = 1 n a i

n:Time series to forecast

p:Price signals of DRD 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?

DRD Stock Forecast (Buy or Sell) for (n+6 month)

Sample Set: Neural Network
Stock/Index: DRD DRDGOLD Limited American Depositary Shares
Time series to forecast n: 28 Dec 2022 for (n+6 month)

According to price forecasts for (n+6 month) 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%

IFRS Reconciliation Adjustments for DRDGOLD Limited American Depositary Shares

  1. In almost every lending transaction the creditor's instrument is ranked relative to the instruments of the debtor's other creditors. An instrument that is subordinated to other instruments may have contractual cash flows that are payments of principal and interest on the principal amount outstanding if the debtor's non-payment is a breach of contract and the holder has a contractual right to unpaid amounts of principal and interest on the principal amount outstanding even in the event of the debtor's bankruptcy. For example, a trade receivable that ranks its creditor as a general creditor would qualify as having payments of principal and interest on the principal amount outstanding. This is the case even if the debtor issued loans that are collateralised, which in the event of bankruptcy would give that loan holder priority over the claims of the general creditor in respect of the collateral but does not affect the contractual right of the general creditor to unpaid principal and other amounts due.
  2. A net position is eligible for hedge accounting only if an entity hedges on a net basis for risk management purposes. Whether an entity hedges in this way is a matter of fact (not merely of assertion or documentation). Hence, an entity cannot apply hedge accounting on a net basis solely to achieve a particular accounting outcome if that would not reflect its risk management approach. Net position hedging must form part of an established risk management strategy. Normally this would be approved by key management personnel as defined in IAS 24.
  3. 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.
  4. Conversely, if the critical terms of the hedging instrument and the hedged item are not closely aligned, there is an increased level of uncertainty about the extent of offset. Consequently, the hedge effectiveness during the term of the hedging relationship is more difficult to predict. In such a situation it might only be possible for an entity to conclude on the basis of a quantitative assessment that an economic relationship exists between the hedged item and the hedging instrument (see paragraphs B6.4.4–B6.4.6). In some situations a quantitative assessment might also be needed to assess whether the hedge ratio used for designating the hedging relationship meets the hedge effectiveness requirements (see paragraphs B6.4.9–B6.4.11). An entity can use the same or different methods for those two different purposes.

*International Financial Reporting Standards (IFRS) adjustment process involves reviewing the company's financial statements and identifying any differences between the company's current accounting practices and the requirements of the IFRS. If there are any such differences, neural network makes adjustments to financial statements to bring them into compliance with the IFRS.

Conclusions

DRDGOLD Limited American Depositary Shares assigned short-term Ba1 & long-term Ba1 estimated rating. We evaluate the prediction models Transductive Learning (ML) with Multiple Regression1,2,3,4 and conclude that the DRD stock is predictable in the short/long term. According to price forecasts for (n+6 month) period, the dominant strategy among neural network is: Hold

DRD DRDGOLD Limited American Depositary Shares Financial Analysis*

Rating Short-Term Long-Term Senior
Outlook*Ba1Ba1
Income StatementBaa2B3
Balance SheetBa3Ba2
Leverage RatiosBaa2Ba3
Cash FlowCaa2Baa2
Rates of Return and ProfitabilityCaa2Baa2

*Financial analysis is the process of evaluating a company's financial performance and position by neural network. It involves reviewing the company's financial statements, including the balance sheet, income statement, and cash flow statement, as well as other financial reports and documents.
How does neural network examine financial reports and understand financial state of the company?

Prediction Confidence Score

Trust metric by Neural Network: 77 out of 100 with 532 signals.

References

  1. G. Shani, R. Brafman, and D. Heckerman. An MDP-based recommender system. In Proceedings of the Eigh- teenth conference on Uncertainty in artificial intelligence, pages 453–460. Morgan Kaufmann Publishers Inc., 2002
  2. Athey S, Tibshirani J, Wager S. 2016b. Generalized random forests. arXiv:1610.01271 [stat.ME]
  3. Ashley, R. (1988), "On the relative worth of recent macroeconomic forecasts," International Journal of Forecasting, 4, 363–376.
  4. Akgiray, V. (1989), "Conditional heteroscedasticity in time series of stock returns: Evidence and forecasts," Journal of Business, 62, 55–80.
  5. Matzkin RL. 1994. Restrictions of economic theory in nonparametric methods. In Handbook of Econometrics, Vol. 4, ed. R Engle, D McFadden, pp. 2523–58. Amsterdam: Elsevier
  6. Abadie A, Cattaneo MD. 2018. Econometric methods for program evaluation. Annu. Rev. Econ. 10:465–503
  7. Çetinkaya, A., Zhang, Y.Z., Hao, Y.M. and Ma, X.Y., Tempur Sealy Stock Forecast & Analysis. AC Investment Research Journal, 101(3).
Frequently Asked QuestionsQ: What is the prediction methodology for DRD stock?
A: DRD stock prediction methodology: We evaluate the prediction models Transductive Learning (ML) and Multiple Regression
Q: Is DRD stock a buy or sell?
A: The dominant strategy among neural network is to Hold DRD Stock.
Q: Is DRDGOLD Limited American Depositary Shares stock a good investment?
A: The consensus rating for DRDGOLD Limited American Depositary Shares is Hold and assigned short-term Ba1 & long-term Ba1 estimated rating.
Q: What is the consensus rating of DRD stock?
A: The consensus rating for DRD is Hold.
Q: What is the prediction period for DRD stock?
A: The prediction period for DRD is (n+6 month)

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