Modelling A.I. in Economics

LON:BME B&M EUROPEAN VALUE RETAIL S.A. (Forecast)

Outlook: B&M EUROPEAN VALUE RETAIL S.A. assigned short-term B2 & long-term B1 forecasted stock rating.
Dominant Strategy : Wait until speculative trend diminishes
Time series to forecast n: 09 Dec 2022 for (n+1 year)
Methodology : Modular Neural Network (Market Volatility Analysis)

Abstract

Security indices are the main tools for evaluation of the status of financial markets. Moreover, a main part of the economy of any country is constituted of investment in stock markets. Therefore, investors could maximize the return of investment if it becomes possible to predict the future trend of stock market with appropriate methods. The nonlinearity and nonstationarity of financial series make their prediction complicated. This study seeks to evaluate the prediction power of machine-learning models in a stock market. (Umer, M., Awais, M. and Muzammul, M., 2019. Stock market prediction using machine learning (ML) algorithms. ADCAIJ: Advances in Distributed Computing and Artificial Intelligence Journal, 8(4), pp.97-116.) We evaluate B&M EUROPEAN VALUE RETAIL S.A. prediction models with Modular Neural Network (Market Volatility Analysis) and Multiple Regression1,2,3,4 and conclude that the LON:BME stock is predictable in the short/long term. According to price forecasts for (n+1 year) period, the dominant strategy among neural network is: Wait until speculative trend diminishes

Key Points

  1. Reaction Function
  2. Stock Rating
  3. What is the best way to predict stock prices?

LON:BME Target Price Prediction Modeling Methodology

We consider B&M EUROPEAN VALUE RETAIL S.A. Decision Process with Modular Neural Network (Market Volatility Analysis) where A is the set of discrete actions of LON:BME 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(Modular Neural Network (Market Volatility Analysis)) X S(n):→ (n+1 year) S = s 1 s 2 s 3

n:Time series to forecast

p:Price signals of LON:BME 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:BME Stock Forecast (Buy or Sell) for (n+1 year)

Sample Set: Neural Network
Stock/Index: LON:BME B&M EUROPEAN VALUE RETAIL S.A.
Time series to forecast n: 09 Dec 2022 for (n+1 year)

According to price forecasts for (n+1 year) period, the dominant strategy among neural network is: Wait until speculative trend diminishes

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 B&M EUROPEAN VALUE RETAIL S.A.

  1. An entity shall apply Annual Improvements to IFRS Standards 2018–2020 to financial liabilities that are modified or exchanged on or after the beginning of the annual reporting period in which the entity first applies the amendment.
  2. Expected credit losses reflect an entity's own expectations of credit losses. However, when considering all reasonable and supportable information that is available without undue cost or effort in estimating expected credit losses, an entity should also consider observable market information about the credit risk of the particular financial instrument or similar financial instruments.
  3. A contractual cash flow characteristic does not affect the classification of the financial asset if it could have only a de minimis effect on the contractual cash flows of the financial asset. To make this determination, an entity must consider the possible effect of the contractual cash flow characteristic in each reporting period and cumulatively over the life of the financial instrument. In addition, if a contractual cash flow characteristic could have an effect on the contractual cash flows that is more than de minimis (either in a single reporting period or cumulatively) but that cash flow characteristic is not genuine, it does not affect the classification of a financial asset. A cash flow characteristic is not genuine if it affects the instrument's contractual cash flows only on the occurrence of an event that is extremely rare, highly abnormal and very unlikely to occur.
  4. When measuring hedge ineffectiveness, an entity shall consider the time value of money. Consequently, the entity determines the value of the hedged item on a present value basis and therefore the change in the value of the hedged item also includes the effect of the time value of money.

*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

B&M EUROPEAN VALUE RETAIL S.A. assigned short-term B2 & long-term B1 forecasted stock rating. We evaluate the prediction models Modular Neural Network (Market Volatility Analysis) with Multiple Regression1,2,3,4 and conclude that the LON:BME stock is predictable in the short/long term. According to price forecasts for (n+1 year) period, the dominant strategy among neural network is: Wait until speculative trend diminishes

Financial State Forecast for LON:BME B&M EUROPEAN VALUE RETAIL S.A. Options & Futures

Rating Short-Term Long-Term Senior
Outlook*B2B1
Operational Risk 6775
Market Risk3540
Technical Analysis6831
Fundamental Analysis6078
Risk Unsystematic3255

Prediction Confidence Score

Trust metric by Neural Network: 91 out of 100 with 813 signals.

References

  1. Efron B, Hastie T, Johnstone I, Tibshirani R. 2004. Least angle regression. Ann. Stat. 32:407–99
  2. Miller A. 2002. Subset Selection in Regression. New York: CRC Press
  3. Breiman L. 1996. Bagging predictors. Mach. Learn. 24:123–40
  4. A. Tamar and S. Mannor. Variance adjusted actor critic algorithms. arXiv preprint arXiv:1310.3697, 2013.
  5. Breiman L, Friedman J, Stone CJ, Olshen RA. 1984. Classification and Regression Trees. Boca Raton, FL: CRC Press
  6. J. Ott. A Markov decision model for a surveillance application and risk-sensitive Markov decision processes. PhD thesis, Karlsruhe Institute of Technology, 2010.
  7. Ruiz FJ, Athey S, Blei DM. 2017. SHOPPER: a probabilistic model of consumer choice with substitutes and complements. arXiv:1711.03560 [stat.ML]
Frequently Asked QuestionsQ: What is the prediction methodology for LON:BME stock?
A: LON:BME stock prediction methodology: We evaluate the prediction models Modular Neural Network (Market Volatility Analysis) and Multiple Regression
Q: Is LON:BME stock a buy or sell?
A: The dominant strategy among neural network is to Wait until speculative trend diminishes LON:BME Stock.
Q: Is B&M EUROPEAN VALUE RETAIL S.A. stock a good investment?
A: The consensus rating for B&M EUROPEAN VALUE RETAIL S.A. is Wait until speculative trend diminishes and assigned short-term B2 & long-term B1 forecasted stock rating.
Q: What is the consensus rating of LON:BME stock?
A: The consensus rating for LON:BME is Wait until speculative trend diminishes.
Q: What is the prediction period for LON:BME stock?
A: The prediction period for LON:BME is (n+1 year)

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