Modelling A.I. in Economics

LON:OGN ORIGIN ENTERPRISES PLC (Forecast)

ORIGIN ENTERPRISES PLC Research Report

Abstract

Prediction of stock prices has been an important area of research for a long time. While supporters of the efficient market hypothesis believe that it is impossible to predict stock prices accurately, there are formal propositions demonstrating that accurate modeling and designing of appropriate variables may lead to models using which stock prices and stock price movement patterns can be very accurately predicted.(Nikou, M., Mansourfar, G. and Bagherzadeh, J., 2019. Stock price prediction using DEEP learning algorithm and its comparison with machine learning algorithms. Intelligent Systems in Accounting, Finance and Management, 26(4), pp.164-174.) We evaluate ORIGIN ENTERPRISES PLC prediction models with Transductive Learning (ML) and ElasticNet Regression1,2,3,4 and conclude that the LON:OGN stock is predictable in the short/long term. According to price forecasts for (n+3 month) period: The dominant strategy among neural network is to Hold LON:OGN stock.

Key Points

  1. How do you know when a stock will go up or down?
  2. What are main components of Markov decision process?
  3. How do you pick a stock?

LON:OGN Target Price Prediction Modeling Methodology

We consider ORIGIN ENTERPRISES PLC Decision Process with Transductive Learning (ML) where A is the set of discrete actions of LON:OGN 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(ElasticNet 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(Transductive Learning (ML)) X S(n):→ (n+3 month) r s rs

n:Time series to forecast

p:Price signals of LON:OGN 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:OGN Stock Forecast (Buy or Sell) for (n+3 month)

Sample Set: Neural Network
Stock/Index: LON:OGN ORIGIN ENTERPRISES PLC
Time series to forecast n: 05 Dec 2022 for (n+3 month)

According to price forecasts for (n+3 month) period: The dominant strategy among neural network is to Hold LON:OGN 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 ORIGIN ENTERPRISES PLC

  1. If an entity measures a hybrid contract at fair value in accordance with paragraphs 4.1.2A, 4.1.4 or 4.1.5 but the fair value of the hybrid contract had not been measured in comparative reporting periods, the fair value of the hybrid contract in the comparative reporting periods shall be the sum of the fair values of the components (ie the non-derivative host and the embedded derivative) at the end of each comparative reporting period if the entity restates prior periods (see paragraph 7.2.15).
  2. An entity's business model is determined at a level that reflects how groups of financial assets are managed together to achieve a particular business objective. The entity's business model does not depend on management's intentions for an individual instrument. Accordingly, this condition is not an instrument-by-instrument approach to classification and should be determined on a higher level of aggregation. However, a single entity may have more than one business model for managing its financial instruments. Consequently, classification need not be determined at the reporting entity level. For example, an entity may hold a portfolio of investments that it manages in order to collect contractual cash flows and another portfolio of investments that it manages in order to trade to realise fair value changes. Similarly, in some circumstances, it may be appropriate to separate a portfolio of financial assets into subportfolios in order to reflect the level at which an entity manages those financial assets. For example, that may be the case if an entity originates or purchases a portfolio of mortgage loans and manages some of the loans with an objective of collecting contractual cash flows and manages the other loans with an objective of selling them.
  3. For the purposes of applying the requirement in paragraph 5.7.7(a), credit risk is different from asset-specific performance risk. Asset-specific performance risk is not related to the risk that an entity will fail to discharge a particular obligation but instead it is related to the risk that a single asset or a group of assets will perform poorly (or not at all).
  4. An entity can also designate only changes in the cash flows or fair value of a hedged item above or below a specified price or other variable (a 'one-sided risk'). The intrinsic value of a purchased option hedging instrument (assuming that it has the same principal terms as the designated risk), but not its time value, reflects a one-sided risk in a hedged item. For example, an entity can designate the variability of future cash flow outcomes resulting from a price increase of a forecast commodity purchase. In such a situation, the entity designates only cash flow losses that result from an increase in the price above the specified level. The hedged risk does not include the time value of a purchased option, because the time value is not a component of the forecast transaction that affects profit or 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

ORIGIN ENTERPRISES PLC assigned short-term B3 & long-term B2 forecasted stock rating. We evaluate the prediction models Transductive Learning (ML) with ElasticNet Regression1,2,3,4 and conclude that the LON:OGN stock is predictable in the short/long term. According to price forecasts for (n+3 month) period: The dominant strategy among neural network is to Hold LON:OGN stock.

Financial State Forecast for LON:OGN ORIGIN ENTERPRISES PLC Options & Futures

Rating Short-Term Long-Term Senior
Outlook*B3B2
Operational Risk 5437
Market Risk3274
Technical Analysis6284
Fundamental Analysis5831
Risk Unsystematic3130

Prediction Confidence Score

Trust metric by Neural Network: 81 out of 100 with 717 signals.

References

  1. M. Puterman. Markov Decision Processes: Discrete Stochastic Dynamic Programming. Wiley, New York, 1994.
  2. Abadie A, Diamond A, Hainmueller J. 2015. Comparative politics and the synthetic control method. Am. J. Political Sci. 59:495–510
  3. Cortes C, Vapnik V. 1995. Support-vector networks. Mach. Learn. 20:273–97
  4. Tibshirani R, Hastie T. 1987. Local likelihood estimation. J. Am. Stat. Assoc. 82:559–67
  5. Athey S, Bayati M, Doudchenko N, Imbens G, Khosravi K. 2017a. Matrix completion methods for causal panel data models. arXiv:1710.10251 [math.ST]
  6. Athey S, Mobius MM, Pál J. 2017c. The impact of aggregators on internet news consumption. Unpublished manuscript, Grad. School Bus., Stanford Univ., Stanford, CA
  7. Bessler, D. A. R. A. Babula, (1987), "Forecasting wheat exports: Do exchange rates matter?" Journal of Business and Economic Statistics, 5, 397–406.
Frequently Asked QuestionsQ: What is the prediction methodology for LON:OGN stock?
A: LON:OGN stock prediction methodology: We evaluate the prediction models Transductive Learning (ML) and ElasticNet Regression
Q: Is LON:OGN stock a buy or sell?
A: The dominant strategy among neural network is to Hold LON:OGN Stock.
Q: Is ORIGIN ENTERPRISES PLC stock a good investment?
A: The consensus rating for ORIGIN ENTERPRISES PLC is Hold and assigned short-term B3 & long-term B2 forecasted stock rating.
Q: What is the consensus rating of LON:OGN stock?
A: The consensus rating for LON:OGN is Hold.
Q: What is the prediction period for LON:OGN stock?
A: The prediction period for LON:OGN is (n+3 month)

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