Modelling A.I. in Economics

LON:IMC IMC EXPLORATION GROUP PLC (Forecast)

Outlook: IMC EXPLORATION GROUP PLC assigned short-term B1 & long-term B1 forecasted stock rating.
Dominant Strategy : Buy
Time series to forecast n: 17 Dec 2022 for (n+6 month)
Methodology : Modular Neural Network (Financial Sentiment Analysis)

Abstract

Predictions on stock market prices are a great challenge due to the fact that it is an immensely complex, chaotic and dynamic environment. There are many studies from various areas aiming to take on that challenge and Machine Learning approaches have been the focus of many of them. There are many examples of Machine Learning algorithms been able to reach satisfactory results when doing that type of prediction. This article studies the usage of LSTM networks on that scenario, to predict future trends of stock prices based on the price history, alongside with technical analysis indicators.(Ravikumar, S. and Saraf, P., 2020, June. Prediction of stock prices using machine learning (regression, classification) Algorithms. In 2020 International Conference for Emerging Technology (INCET) (pp. 1-5). IEEE.) We evaluate IMC EXPLORATION GROUP PLC prediction models with Modular Neural Network (Financial Sentiment Analysis) and Linear Regression1,2,3,4 and conclude that the LON:IMC stock is predictable in the short/long term. According to price forecasts for (n+6 month) period, the dominant strategy among neural network is: Buy

Key Points

  1. Reaction Function
  2. Is Target price a good indicator?
  3. How can neural networks improve predictions?

LON:IMC Target Price Prediction Modeling Methodology

We consider IMC EXPLORATION GROUP PLC Decision Process with Modular Neural Network (Financial Sentiment Analysis) where A is the set of discrete actions of LON:IMC 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= 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 (Financial Sentiment Analysis)) X S(n):→ (n+6 month) R = 1 0 0 0 1 0 0 0 1

n:Time series to forecast

p:Price signals of LON:IMC 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:IMC Stock Forecast (Buy or Sell) for (n+6 month)

Sample Set: Neural Network
Stock/Index: LON:IMC IMC EXPLORATION GROUP PLC
Time series to forecast n: 17 Dec 2022 for (n+6 month)

According to price forecasts for (n+6 month) period, the dominant strategy among neural network is: Buy

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 IMC EXPLORATION GROUP PLC

  1. A hedge of a firm commitment (for example, a hedge of the change in fuel price relating to an unrecognised contractual commitment by an electric utility to purchase fuel at a fixed price) is a hedge of an exposure to a change in fair value. Accordingly, such a hedge is a fair value hedge. However, in accordance with paragraph 6.5.4, a hedge of the foreign currency risk of a firm commitment could alternatively be accounted for as a cash flow hedge.
  2. The accounting for the time value of options in accordance with paragraph 6.5.15 applies only to the extent that the time value relates to the hedged item (aligned time value). The time value of an option relates to the hedged item if the critical terms of the option (such as the nominal amount, life and underlying) are aligned with the hedged item. Hence, if the critical terms of the option and the hedged item are not fully aligned, an entity shall determine the aligned time value, ie how much of the time value included in the premium (actual time value) relates to the hedged item (and therefore should be treated in accordance with paragraph 6.5.15). An entity determines the aligned time value using the valuation of the option that would have critical terms that perfectly match the hedged item.
  3. An entity that first applies IFRS 17 as amended in June 2020 at the same time it first applies this Standard shall apply paragraphs 7.2.1–7.2.28 instead of paragraphs 7.2.38–7.2.42.
  4. If an entity previously accounted for a derivative liability that is linked to, and must be settled by, delivery of an equity instrument that does not have a quoted price in an active market for an identical instrument (ie a Level 1 input) at cost in accordance with IAS 39, it shall measure that derivative liability at fair value at the date of initial application. Any difference between the previous carrying amount and the fair value shall be recognised in the opening retained earnings of the reporting period that includes the date of initial application.

*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

IMC EXPLORATION GROUP PLC assigned short-term B1 & long-term B1 forecasted stock rating. We evaluate the prediction models Modular Neural Network (Financial Sentiment Analysis) with Linear Regression1,2,3,4 and conclude that the LON:IMC stock is predictable in the short/long term. According to price forecasts for (n+6 month) period, the dominant strategy among neural network is: Buy

Financial State Forecast for LON:IMC IMC EXPLORATION GROUP PLC Options & Futures

Rating Short-Term Long-Term Senior
Outlook*B1B1
Operational Risk 5655
Market Risk3037
Technical Analysis4989
Fundamental Analysis8152
Risk Unsystematic9064

Prediction Confidence Score

Trust metric by Neural Network: 73 out of 100 with 488 signals.

References

  1. R. Sutton, D. McAllester, S. Singh, and Y. Mansour. Policy gradient methods for reinforcement learning with function approximation. In Proceedings of Advances in Neural Information Processing Systems 12, pages 1057–1063, 2000
  2. Çetinkaya, A., Zhang, Y.Z., Hao, Y.M. and Ma, X.Y., When to Sell and When to Hold AQN Stock. AC Investment Research Journal, 101(3).
  3. M. Puterman. Markov Decision Processes: Discrete Stochastic Dynamic Programming. Wiley, New York, 1994.
  4. C. Wu and Y. Lin. Minimizing risk models in Markov decision processes with policies depending on target values. Journal of Mathematical Analysis and Applications, 231(1):47–67, 1999
  5. C. Wu and Y. Lin. Minimizing risk models in Markov decision processes with policies depending on target values. Journal of Mathematical Analysis and Applications, 231(1):47–67, 1999
  6. A. Tamar and S. Mannor. Variance adjusted actor critic algorithms. arXiv preprint arXiv:1310.3697, 2013.
  7. Bamler R, Mandt S. 2017. Dynamic word embeddings via skip-gram filtering. In Proceedings of the 34th Inter- national Conference on Machine Learning, pp. 380–89. La Jolla, CA: Int. Mach. Learn. Soc.
Frequently Asked QuestionsQ: What is the prediction methodology for LON:IMC stock?
A: LON:IMC stock prediction methodology: We evaluate the prediction models Modular Neural Network (Financial Sentiment Analysis) and Linear Regression
Q: Is LON:IMC stock a buy or sell?
A: The dominant strategy among neural network is to Buy LON:IMC Stock.
Q: Is IMC EXPLORATION GROUP PLC stock a good investment?
A: The consensus rating for IMC EXPLORATION GROUP PLC is Buy and assigned short-term B1 & long-term B1 forecasted stock rating.
Q: What is the consensus rating of LON:IMC stock?
A: The consensus rating for LON:IMC is Buy.
Q: What is the prediction period for LON:IMC stock?
A: The prediction period for LON:IMC is (n+6 month)

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