Modelling A.I. in Economics

LON:GRI GRAINGER PLC (Forecast)

Buy

Hold

Sell

Speculative

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Outlook: GRAINGER PLC assigned short-term B1 & long-term B2 forecasted stock rating.
Dominant Strategy : Sell
Time series to forecast n: 06 Dec 2022 for (n+1 year)

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Abstract

The presented paper modeled and predicted stock returns using LSTM. The historical data of stock market were transformed into 30-days-long sequences with 10 learning features and 7-day earning rate labeling. The model was fitted by training on 1200000 sequences and tested using the other 350000 sequences. (Obthong, M., Tantisantiwong, N., Jeamwatthanachai, W. and Wills, G., 2020. A survey on machine learning for stock price prediction: algorithms and techniques.) We evaluate GRAINGER PLC prediction models with Multi-Task Learning (ML) and Independent T-Test1,2,3,4 and conclude that the LON:GRI stock is predictable in the short/long term. According to price forecasts for (n+1 year) period: The dominant strategy among neural network is to Sell LON:GRI stock.

Key Points

  1. Why do we need predictive models?
  2. Market Risk
  3. What is statistical models in machine learning?

LON:GRI Target Price Prediction Modeling Methodology

We consider GRAINGER PLC Decision Process with Multi-Task Learning (ML) where A is the set of discrete actions of LON:GRI 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(Independent T-Test)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(Multi-Task Learning (ML)) X S(n):→ (n+1 year) i = 1 n a i

n:Time series to forecast

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

Sample Set: Neural Network
Stock/Index: LON:GRI GRAINGER PLC
Time series to forecast n: 06 Dec 2022 for (n+1 year)

According to price forecasts for (n+1 year) period: The dominant strategy among neural network is to Sell LON:GRI 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 GRAINGER PLC

  1. For the purpose of this Standard, reasonable and supportable information is that which is reasonably available at the reporting date without undue cost or effort, including information about past events, current conditions and forecasts of future economic conditions. Information that is available for financial reporting purposes is considered to be available without undue cost or effort.
  2. For floating-rate financial assets and floating-rate financial liabilities, periodic re-estimation of cash flows to reflect the movements in the market rates of interest alters the effective interest rate. If a floating-rate financial asset or a floating-rate financial liability is recognised initially at an amount equal to the principal receivable or payable on maturity, re-estimating the future interest payments normally has no significant effect on the carrying amount of the asset or the liability.
  3. In the reporting period that includes the date of initial application of these amendments, an entity is not required to present the quantitative information required by paragraph 28(f) of IAS 8.
  4. Alternatively, the entity may base the assessment on both types of information, ie qualitative factors that are not captured through the internal ratings process and a specific internal rating category at the reporting date, taking into consideration the credit risk characteristics at initial recognition, if both types of information are relevant.

*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

GRAINGER PLC assigned short-term B1 & long-term B2 forecasted stock rating. We evaluate the prediction models Multi-Task Learning (ML) with Independent T-Test1,2,3,4 and conclude that the LON:GRI stock is predictable in the short/long term. According to price forecasts for (n+1 year) period: The dominant strategy among neural network is to Sell LON:GRI stock.

Financial State Forecast for LON:GRI GRAINGER PLC Options & Futures

Rating Short-Term Long-Term Senior
Outlook*B1B2
Operational Risk 4581
Market Risk3575
Technical Analysis8939
Fundamental Analysis5734
Risk Unsystematic7644

Prediction Confidence Score

Trust metric by Neural Network: 92 out of 100 with 498 signals.

References

  1. Bertsimas D, King A, Mazumder R. 2016. Best subset selection via a modern optimization lens. Ann. Stat. 44:813–52
  2. Chernozhukov V, Chetverikov D, Demirer M, Duflo E, Hansen C, et al. 2018a. Double/debiased machine learning for treatment and structural parameters. Econom. J. 21:C1–68
  3. J. Z. Leibo, V. Zambaldi, M. Lanctot, J. Marecki, and T. Graepel. Multi-agent Reinforcement Learning in Sequential Social Dilemmas. In Proceedings of the 16th International Conference on Autonomous Agents and Multiagent Systems (AAMAS 2017), Sao Paulo, Brazil, 2017
  4. Greene WH. 2000. Econometric Analysis. Upper Saddle River, N J: Prentice Hall. 4th ed.
  5. Efron B, Hastie T, Johnstone I, Tibshirani R. 2004. Least angle regression. Ann. Stat. 32:407–99
  6. Athey S, Blei D, Donnelly R, Ruiz F. 2017b. Counterfactual inference for consumer choice across many prod- uct categories. AEA Pap. Proc. 108:64–67
  7. Bastani H, Bayati M. 2015. Online decision-making with high-dimensional covariates. Work. Pap., Univ. Penn./ Stanford Grad. School Bus., Philadelphia/Stanford, CA
Frequently Asked QuestionsQ: What is the prediction methodology for LON:GRI stock?
A: LON:GRI stock prediction methodology: We evaluate the prediction models Multi-Task Learning (ML) and Independent T-Test
Q: Is LON:GRI stock a buy or sell?
A: The dominant strategy among neural network is to Sell LON:GRI Stock.
Q: Is GRAINGER PLC stock a good investment?
A: The consensus rating for GRAINGER PLC is Sell and assigned short-term B1 & long-term B2 forecasted stock rating.
Q: What is the consensus rating of LON:GRI stock?
A: The consensus rating for LON:GRI is Sell.
Q: What is the prediction period for LON:GRI stock?
A: The prediction period for LON:GRI is (n+1 year)

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