## Abstract

We present an Artificial Neural Network (ANN) approach to predict stock market indices, particularly with respect to the forecast of their trend movements up or down. Exploiting different Neural Networks architectures, we provide numerical analysis of concrete financial time series. In particular, after a brief r ́esum ́e of the existing literature on the subject, we consider the Multi-layer Perceptron (MLP), the Convolutional Neural Net- works (CNN), and the Long Short-Term Memory (LSTM) recurrent neural networks techniques. (Naik, N. and Mohan, B.R., 2019, February. Optimal feature selection of technical indicator and stock prediction using machine learning technique. In International Conference on Emerging Technologies in Computer Engineering (pp. 261-268). Springer, Singapore.)** We evaluate Iteris Inc. Common Stock prediction models with Supervised Machine Learning (ML) and Statistical Hypothesis Testing ^{1,2,3,4} and conclude that the ITI stock is predictable in the short/long term. **

**According to price forecasts for (n+4 weeks) period: The dominant strategy among neural network is to Hold ITI stock.**

## Key Points

- What is the use of Markov decision process?
- How do you pick a stock?
- What is prediction model?

## ITI Target Price Prediction Modeling Methodology

We consider Iteris Inc. Common Stock Decision Process with Supervised Machine Learning (ML) where A is the set of discrete actions of ITI 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(Statistical Hypothesis Testing)

^{5,6,7}= $\begin{array}{cccc}{p}_{\mathrm{a}1}& {p}_{\mathrm{a}2}& \dots & {p}_{1n}\\ & \vdots \\ {p}_{j1}& {p}_{j2}& \dots & {p}_{jn}\\ & \vdots \\ {p}_{k1}& {p}_{k2}& \dots & {p}_{kn}\\ & \vdots \\ {p}_{n1}& {p}_{n2}& \dots & {p}_{nn}\end{array}$ X R(Supervised Machine Learning (ML)) X S(n):→ (n+4 weeks) $\sum _{i=1}^{n}\left({s}_{i}\right)$

n:Time series to forecast

p:Price signals of ITI 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?

## ITI Stock Forecast (Buy or Sell) for (n+4 weeks)

**Sample Set:**Neural Network

**Stock/Index:**ITI Iteris Inc. Common Stock

**Time series to forecast n: 04 Dec 2022**for (n+4 weeks)

**According to price forecasts for (n+4 weeks) period: The dominant strategy among neural network is to Hold ITI stock.**

**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 (Yellow to Green): *Technical Analysis%**

## Adjusted IFRS* Prediction Methods for Iteris Inc. Common Stock

- An entity can rebut this presumption. However, it can do so only when it has reasonable and supportable information available that demonstrates that even if contractual payments become more than 30 days past due, this does not represent a significant increase in the credit risk of a financial instrument. For example when non-payment was an administrative oversight, instead of resulting from financial difficulty of the borrower, or the entity has access to historical evidence that demonstrates that there is no correlation between significant increases in the risk of a default occurring and financial assets on which payments are more than 30 days past due, but that evidence does identify such a correlation when payments are more than 60 days past due.
- However, in some cases, the time value of money element may be modified (ie imperfect). That would be the case, for example, if a financial asset's interest rate is periodically reset but the frequency of that reset does not match the tenor of the interest rate (for example, the interest rate resets every month to a one-year rate) or if a financial asset's interest rate is periodically reset to an average of particular short- and long-term interest rates. In such cases, an entity must assess the modification to determine whether the contractual cash flows represent solely payments of principal and interest on the principal amount outstanding. In some circumstances, the entity may be able to make that determination by performing a qualitative assessment of the time value of money element whereas, in other circumstances, it may be necessary to perform a quantitative assessment.
- For a discontinued hedging relationship, when the interest rate benchmark on which the hedged future cash flows had been based is changed as required by interest rate benchmark reform, for the purpose of applying paragraph 6.5.12 in order to determine whether the hedged future cash flows are expected to occur, the amount accumulated in the cash flow hedge reserve for that hedging relationship shall be deemed to be based on the alternative benchmark rate on which the hedged future cash flows will be based.
- The purpose of estimating expected credit losses is neither to estimate a worstcase scenario nor to estimate the best-case scenario. Instead, an estimate of expected credit losses shall always reflect the possibility that a credit loss occurs and the possibility that no credit loss occurs even if the most likely outcome is no credit loss.

*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

Iteris Inc. Common Stock assigned short-term B1 & long-term Ba3 forecasted stock rating.** We evaluate the prediction models Supervised Machine Learning (ML) with Statistical Hypothesis Testing ^{1,2,3,4} and conclude that the ITI stock is predictable in the short/long term.**

**According to price forecasts for (n+4 weeks) period: The dominant strategy among neural network is to Hold ITI stock.**

### Financial State Forecast for ITI Iteris Inc. Common Stock Options & Futures

Rating | Short-Term | Long-Term Senior |
---|---|---|

Outlook* | B1 | Ba3 |

Operational Risk | 73 | 71 |

Market Risk | 79 | 50 |

Technical Analysis | 41 | 74 |

Fundamental Analysis | 60 | 76 |

Risk Unsystematic | 54 | 59 |

### Prediction Confidence Score

## References

- Mnih A, Teh YW. 2012. A fast and simple algorithm for training neural probabilistic language models. In Proceedings of the 29th International Conference on Machine Learning, pp. 419–26. La Jolla, CA: Int. Mach. Learn. Soc.
- Babula, R. A. (1988), "Contemporaneous correlation and modeling Canada's imports of U.S. crops," Journal of Agricultural Economics Research, 41, 33–38.
- Ruiz FJ, Athey S, Blei DM. 2017. SHOPPER: a probabilistic model of consumer choice with substitutes and complements. arXiv:1711.03560 [stat.ML]
- J. Harb and D. Precup. Investigating recurrence and eligibility traces in deep Q-networks. In Deep Reinforcement Learning Workshop, NIPS 2016, Barcelona, Spain, 2016.
- Byron, R. P. O. Ashenfelter (1995), "Predicting the quality of an unborn grange," Economic Record, 71, 40–53.
- J. Hu and M. P. Wellman. Nash q-learning for general-sum stochastic games. Journal of Machine Learning Research, 4:1039–1069, 2003.
- V. Borkar. Stochastic approximation: a dynamical systems viewpoint. Cambridge University Press, 2008

## Frequently Asked Questions

Q: What is the prediction methodology for ITI stock?A: ITI stock prediction methodology: We evaluate the prediction models Supervised Machine Learning (ML) and Statistical Hypothesis Testing

Q: Is ITI stock a buy or sell?

A: The dominant strategy among neural network is to Hold ITI Stock.

Q: Is Iteris Inc. Common Stock stock a good investment?

A: The consensus rating for Iteris Inc. Common Stock is Hold and assigned short-term B1 & long-term Ba3 forecasted stock rating.

Q: What is the consensus rating of ITI stock?

A: The consensus rating for ITI is Hold.

Q: What is the prediction period for ITI stock?

A: The prediction period for ITI is (n+4 weeks)

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