Modelling A.I. in Economics

LON:SMWH WH SMITH PLC

Outlook: WH SMITH PLC assigned short-term Ba3 & long-term Ba3 forecasted stock rating.
Dominant Strategy : Hold
Time series to forecast n: 16 Dec 2022 for (n+16 weeks)
Methodology : Modular Neural Network (Emotional Trigger/Responses Analysis)

Abstract

This paper addresses problem of predicting direction of movement of stock and stock price index. The study compares four prediction models, Artificial Neural Network (ANN), Support Vector Machine (SVM), random forest and naive-Bayes with two approaches for input to these models.(Lee, J.W., 2001, June. Stock price prediction using reinforcement learning. In ISIE 2001. 2001 IEEE International Symposium on Industrial Electronics Proceedings (Cat. No. 01TH8570) (Vol. 1, pp. 690-695). IEEE.) We evaluate WH SMITH PLC prediction models with Modular Neural Network (Emotional Trigger/Responses Analysis) and Beta1,2,3,4 and conclude that the LON:SMWH stock is predictable in the short/long term. According to price forecasts for (n+16 weeks) period, the dominant strategy among neural network is: Hold

Key Points

  1. Should I buy stocks now or wait amid such uncertainty?
  2. Nash Equilibria
  3. Fundemental Analysis with Algorithmic Trading

LON:SMWH Target Price Prediction Modeling Methodology

We consider WH SMITH PLC Decision Process with Modular Neural Network (Emotional Trigger/Responses Analysis) where A is the set of discrete actions of LON:SMWH 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(Beta)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 (Emotional Trigger/Responses Analysis)) X S(n):→ (n+16 weeks) i = 1 n s i

n:Time series to forecast

p:Price signals of LON:SMWH stock

j:Nash equilibria (Neural Network)

k:Dominated move

a:Best response for target price

 

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How do AC Investment Research machine learning (predictive) algorithms actually work?

LON:SMWH Stock Forecast (Buy or Sell) for (n+16 weeks)

Sample Set: Neural Network
Stock/Index: LON:SMWH WH SMITH PLC
Time series to forecast n: 16 Dec 2022 for (n+16 weeks)

According to price forecasts for (n+16 weeks) period, the dominant strategy among neural network is: Hold

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 WH SMITH PLC

  1. The definition of a derivative in this Standard includes contracts that are settled gross by delivery of the underlying item (eg a forward contract to purchase a fixed rate debt instrument). An entity may have a contract to buy or sell a non-financial item that can be settled net in cash or another financial instrument or by exchanging financial instruments (eg a contract to buy or sell a commodity at a fixed price at a future date). Such a contract is within the scope of this Standard unless it was entered into and continues to be held for the purpose of delivery of a non-financial item in accordance with the entity's expected purchase, sale or usage requirements. However, this Standard applies to such contracts for an entity's expected purchase, sale or usage requirements if the entity makes a designation in accordance with paragraph 2.5 (see paragraphs 2.4–2.7).
  2. If subsequently an entity reasonably expects that the alternative benchmark rate will not be separately identifiable within 24 months from the date the entity designated it as a non-contractually specified risk component for the first time, the entity shall cease applying the requirement in paragraph 6.9.11 to that alternative benchmark rate and discontinue hedge accounting prospectively from the date of that reassessment for all hedging relationships in which the alternative benchmark rate was designated as a noncontractually specified risk component.
  3. IFRS 17, issued in May 2017, amended paragraphs 2.1, B2.1, B2.4, B2.5 and B4.1.30, and added paragraph 3.3.5. Amendments to IFRS 17, issued in June 2020, further amended paragraph 2.1 and added paragraphs 7.2.36‒7.2.42. An entity shall apply those amendments when it applies IFRS 17.
  4. IFRS 15, issued in May 2014, amended paragraphs 3.1.1, 4.2.1, 5.1.1, 5.2.1, 5.7.6, B3.2.13, B5.7.1, C5 and C42 and deleted paragraph C16 and its related heading. Paragraphs 5.1.3 and 5.7.1A, and a definition to Appendix A, were added. An entity shall apply those amendments when it applies IFRS 15.

*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

WH SMITH PLC assigned short-term Ba3 & long-term Ba3 forecasted stock rating. We evaluate the prediction models Modular Neural Network (Emotional Trigger/Responses Analysis) with Beta1,2,3,4 and conclude that the LON:SMWH stock is predictable in the short/long term. According to price forecasts for (n+16 weeks) period, the dominant strategy among neural network is: Hold

Financial State Forecast for LON:SMWH WH SMITH PLC Options & Futures

Rating Short-Term Long-Term Senior
Outlook*Ba3Ba3
Operational Risk 6678
Market Risk4247
Technical Analysis4690
Fundamental Analysis8863
Risk Unsystematic8049

Prediction Confidence Score

Trust metric by Neural Network: 87 out of 100 with 559 signals.

References

  1. Breiman L. 1993. Better subset selection using the non-negative garotte. Tech. Rep., Univ. Calif., Berkeley
  2. Chipman HA, George EI, McCulloch RE. 2010. Bart: Bayesian additive regression trees. Ann. Appl. Stat. 4:266–98
  3. S. J. Russell and P. Norvig. Artificial Intelligence: A Modern Approach. Prentice Hall, Englewood Cliffs, NJ, 3nd edition, 2010
  4. Bennett J, Lanning S. 2007. The Netflix prize. In Proceedings of KDD Cup and Workshop 2007, p. 35. New York: ACM
  5. V. Konda and J. Tsitsiklis. Actor-Critic algorithms. In Proceedings of Advances in Neural Information Processing Systems 12, pages 1008–1014, 2000
  6. Çetinkaya, A., Zhang, Y.Z., Hao, Y.M. and Ma, X.Y., Can neural networks predict stock market?(ATVI Stock Forecast). AC Investment Research Journal, 101(3).
  7. 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
Frequently Asked QuestionsQ: What is the prediction methodology for LON:SMWH stock?
A: LON:SMWH stock prediction methodology: We evaluate the prediction models Modular Neural Network (Emotional Trigger/Responses Analysis) and Beta
Q: Is LON:SMWH stock a buy or sell?
A: The dominant strategy among neural network is to Hold LON:SMWH Stock.
Q: Is WH SMITH PLC stock a good investment?
A: The consensus rating for WH SMITH PLC is Hold and assigned short-term Ba3 & long-term Ba3 forecasted stock rating.
Q: What is the consensus rating of LON:SMWH stock?
A: The consensus rating for LON:SMWH is Hold.
Q: What is the prediction period for LON:SMWH stock?
A: The prediction period for LON:SMWH is (n+16 weeks)

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