LON:AO. AO WORLD PLC

Outlook: AO WORLD PLC assigned short-term Ba2 & long-term B2 forecasted stock rating.
Dominant Strategy : Sell
Time series to forecast n: 19 Dec 2022 for (n+3 month)
Methodology : Modular Neural Network (Market Direction Analysis)

Abstract

The search for models to predict the prices of financial markets is still a highly researched topic, despite major related challenges. The prices of financial assets are non-linear, dynamic, and chaotic; thus, they are financial time series that are difficult to predict. Among the latest techniques, machine learning models are some of the most researched, given their capabilities for recognizing complex patterns in various applications.(Ticknor, J.L., 2013. A Bayesian regularized artificial neural network for stock market forecasting. Expert systems with applications, 40(14), pp.5501-5506.) We evaluate AO WORLD PLC prediction models with Modular Neural Network (Market Direction Analysis) and Linear Regression^1,2,3,4 and conclude that the LON:AO. stock is predictable in the short/long term. According to price forecasts for (n+3 month) period, the dominant strategy among neural network is: Sell

Key Points

1. What is prediction in deep learning?
2. Technical Analysis with Algorithmic Trading
3. Prediction Modeling

LON:AO. Target Price Prediction Modeling Methodology

We consider AO WORLD PLC Decision Process with Modular Neural Network (Market Direction Analysis) where A is the set of discrete actions of LON:AO. 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(Linear Regression)^5,6,7= $\begin{array}{cccc}{p}_{\mathrm{a}1}& p_{\mathrm{a}2}& \dots & p_{1n}\\ & ⋮\\ p_{j1}& p_{j2}& \dots & p_{jn}\\ & ⋮\\ p_{k1}& p_{k2}& \dots & p_{kn}\\ & ⋮\\ p_{n1}& p_{n2}& \dots & p_{nn}\end{array}$ X R(Modular Neural Network (Market Direction Analysis)) X S(n):→ (n+3 month) $\begin{array}{l}\int r^s\mathrm{rs}\end{array}$

n:Time series to forecast

p:Price signals of LON:AO. 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?

LON:AO. Stock Forecast (Buy or Sell) for (n+3 month)

Sample Set: Neural Network
Stock/Index: LON:AO. AO WORLD PLC
Time series to forecast n: 19 Dec 2022 for (n+3 month)

According to price forecasts for (n+3 month) 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 AO WORLD PLC

1. If a put option written by an entity prevents a transferred asset from being derecognised and the entity measures the transferred asset at fair value, the associated liability is measured at the option exercise price plus the time value of the option. The measurement of the asset at fair value is limited to the lower of the fair value and the option exercise price because the entity has no right to increases in the fair value of the transferred asset above the exercise price of the option. This ensures that the net carrying amount of the asset and the associated liability is the fair value of the put option obligation. For example, if the fair value of the underlying asset is CU120, the option exercise price is CU100 and the time value of the option is CU5, the carrying amount of the associated liability is CU105 (CU100 + CU5) and the carrying amount of the asset is CU100 (in this case the option exercise price).
2. Conversely, if changes in the extent of offset indicate that the fluctuation is around a hedge ratio that is different from the hedge ratio that is currently used for that hedging relationship, or that there is a trend leading away from that hedge ratio, hedge ineffectiveness can be reduced by adjusting the hedge ratio, whereas retaining the hedge ratio would increasingly produce hedge ineffectiveness. Hence, in such circumstances, an entity must evaluate whether the hedging relationship reflects an imbalance between the weightings of the hedged item and the hedging instrument that would create hedge ineffectiveness (irrespective of whether recognised or not) that could result in an accounting outcome that would be inconsistent with the purpose of hedge accounting. If the hedge ratio is adjusted, it also affects the measurement and recognition of hedge ineffectiveness because, on rebalancing, the hedge ineffectiveness of the hedging relationship must be determined and recognised immediately before adjusting the hedging relationship in accordance with paragraph B6.5.8.
3. An entity shall apply Prepayment Features with Negative Compensation (Amendments to IFRS 9) retrospectively in accordance with IAS 8, except as specified in paragraphs 7.2.30–7.2.34
4. An embedded prepayment option in an interest-only or principal-only strip is closely related to the host contract provided the host contract (i) initially resulted from separating the right to receive contractual cash flows of a financial instrument that, in and of itself, did not contain an embedded derivative, and (ii) does not contain any terms not present in the original host debt contract.

*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

AO WORLD PLC assigned short-term Ba2 & long-term B2 forecasted stock rating. We evaluate the prediction models Modular Neural Network (Market Direction Analysis) with Linear Regression^1,2,3,4 and conclude that the LON:AO. stock is predictable in the short/long term. According to price forecasts for (n+3 month) period, the dominant strategy among neural network is: Sell

LON:AO. AO WORLD PLC Financial Analysis*

Rating	Short-Term	Long-Term Senior
Outlook*	Ba2	B2
Operational Risk	81	64
Market Risk	63	42
Technical Analysis	44	46
Fundamental Analysis	60	46
Risk Unsystematic	90	63

*Financial analysis is the process of evaluating a company's financial performance and position. 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: 79 out of 100 with 666 signals.

References

1. Robins J, Rotnitzky A. 1995. Semiparametric efficiency in multivariate regression models with missing data. J. Am. Stat. Assoc. 90:122–29
2. Gentzkow M, Kelly BT, Taddy M. 2017. Text as data. NBER Work. Pap. 23276
3. Cheung, Y. M.D. Chinn (1997), "Further investigation of the uncertain unit root in GNP," Journal of Business and Economic Statistics, 15, 68–73.
4. Vapnik V. 2013. The Nature of Statistical Learning Theory. Berlin: Springer
5. Zou H, Hastie T. 2005. Regularization and variable selection via the elastic net. J. R. Stat. Soc. B 67:301–20
6. Efron B, Hastie T. 2016. Computer Age Statistical Inference, Vol. 5. Cambridge, UK: Cambridge Univ. Press
7. Angrist JD, Pischke JS. 2008. Mostly Harmless Econometrics: An Empiricist's Companion. Princeton, NJ: Princeton Univ. Press

Frequently Asked Questions

Q: What is the prediction methodology for LON:AO. stock?
A: LON:AO. stock prediction methodology: We evaluate the prediction models Modular Neural Network (Market Direction Analysis) and Linear Regression
Q: Is LON:AO. stock a buy or sell?
A: The dominant strategy among neural network is to Sell LON:AO. Stock.
Q: Is AO WORLD PLC stock a good investment?
A: The consensus rating for AO WORLD PLC is Sell and assigned short-term Ba2 & long-term B2 forecasted stock rating.
Q: What is the consensus rating of LON:AO. stock?
A: The consensus rating for LON:AO. is Sell.
Q: What is the prediction period for LON:AO. stock?
A: The prediction period for LON:AO. is (n+3 month)

Premium

• Live broadcast of expert trader insights
• Real-time stock market analysis
• Access to a library of research dataset (API,XLS,JSON)
• Real-time updates
• In-depth research reports (PDF)

Login