Modelling A.I. in Economics

PCG^H Pacific Gas & Electric Co. 4.50% 1st Preferred Stock (Forecast)

Outlook: Pacific Gas & Electric Co. 4.50% 1st Preferred Stock assigned short-term Ba1 & long-term Ba1 estimated rating.
Dominant Strategy : Buy
Time series to forecast n: 30 Dec 2022 for (n+3 month)
Methodology : Modular Neural Network (CNN Layer)

Abstract

The categorization of high dimensional data present a fascinating challenge to machine learning models as frequent number of highly correlated dimensions or attributes can affect the accuracy of classification model. In this paper, the problem of high dimensionality of stock exchange is investigated to predict the market trends by applying the principal component analysis (PCA) with linear regression. PCA can help to improve the predictive performance of machine learning methods while reducing the redundancy among the data.(De Faria, E.L., Albuquerque, M.P., Gonzalez, J.L., Cavalcante, J.T.P. and Albuquerque, M.P., 2009. Predicting the Brazilian stock market through neural networks and adaptive exponential smoothing methods. Expert Systems with Applications, 36(10), pp.12506-12509.) We evaluate Pacific Gas & Electric Co. 4.50% 1st Preferred Stock prediction models with Modular Neural Network (CNN Layer) and Sign Test1,2,3,4 and conclude that the PCG^H stock is predictable in the short/long term. According to price forecasts for (n+3 month) period, the dominant strategy among neural network is: Buy

Key Points

  1. How can neural networks improve predictions?
  2. Technical Analysis with Algorithmic Trading
  3. What are main components of Markov decision process?

PCG^H Target Price Prediction Modeling Methodology

We consider Pacific Gas & Electric Co. 4.50% 1st Preferred Stock Decision Process with Modular Neural Network (CNN Layer) where A is the set of discrete actions of PCG^H 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(Sign 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(Modular Neural Network (CNN Layer)) X S(n):→ (n+3 month) R = 1 0 0 0 1 0 0 0 1

n:Time series to forecast

p:Price signals of PCG^H 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?

PCG^H Stock Forecast (Buy or Sell) for (n+3 month)

Sample Set: Neural Network
Stock/Index: PCG^H Pacific Gas & Electric Co. 4.50% 1st Preferred Stock
Time series to forecast n: 30 Dec 2022 for (n+3 month)

According to price forecasts for (n+3 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%

IFRS Reconciliation Adjustments for Pacific Gas & Electric Co. 4.50% 1st Preferred Stock

  1. When an entity designates a financial liability as at fair value through profit or loss, it must determine whether presenting in other comprehensive income the effects of changes in the liability's credit risk would create or enlarge an accounting mismatch in profit or loss. An accounting mismatch would be created or enlarged if presenting the effects of changes in the liability's credit risk in other comprehensive income would result in a greater mismatch in profit or loss than if those amounts were presented in profit or loss
  2. Interest Rate Benchmark Reform—Phase 2, which amended IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16, issued in August 2020, added paragraphs 5.4.5–5.4.9, 6.8.13, Section 6.9 and paragraphs 7.2.43–7.2.46. An entity shall apply these amendments for annual periods beginning on or after 1 January 2021. Earlier application is permitted. If an entity applies these amendments for an earlier period, it shall disclose that fact.
  3. If an entity previously accounted at cost (in accordance with IAS 39), for an investment in an equity instrument that does not have a quoted price in an active market for an identical instrument (ie a Level 1 input) (or for a derivative asset that is linked to and must be settled by delivery of such an equity instrument) it shall measure that instrument 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 (or other component of equity, as appropriate) of the reporting period that includes the date of initial application.
  4. If the underlyings are not the same but are economically related, there can be situations in which the values of the hedging instrument and the hedged item move in the same direction, for example, because the price differential between the two related underlyings changes while the underlyings themselves do not move significantly. That is still consistent with an economic relationship between the hedging instrument and the hedged item if the values of the hedging instrument and the hedged item are still expected to typically move in the opposite direction when the underlyings move.

*International Financial Reporting Standards (IFRS) adjustment process involves reviewing the company's financial statements and identifying any differences between the company's current accounting practices and the requirements of the IFRS. If there are any such differences, neural network makes adjustments to financial statements to bring them into compliance with the IFRS.

Conclusions

Pacific Gas & Electric Co. 4.50% 1st Preferred Stock assigned short-term Ba1 & long-term Ba1 estimated rating. We evaluate the prediction models Modular Neural Network (CNN Layer) with Sign Test1,2,3,4 and conclude that the PCG^H stock is predictable in the short/long term. According to price forecasts for (n+3 month) period, the dominant strategy among neural network is: Buy

PCG^H Pacific Gas & Electric Co. 4.50% 1st Preferred Stock Financial Analysis*

Rating Short-Term Long-Term Senior
Outlook*Ba1Ba1
Income StatementCBaa2
Balance SheetBaa2Caa2
Leverage RatiosBa3Ba3
Cash FlowBaa2B1
Rates of Return and ProfitabilityBaa2Ba3

*Financial analysis is the process of evaluating a company's financial performance and position by neural network. It involves reviewing the company's financial statements, including the balance sheet, income statement, and cash flow statement, as well as other financial reports and documents.
How does neural network examine financial reports and understand financial state of the company?

Prediction Confidence Score

Trust metric by Neural Network: 87 out of 100 with 656 signals.

References

  1. Arjovsky M, Bottou L. 2017. Towards principled methods for training generative adversarial networks. arXiv:1701.04862 [stat.ML]
  2. Çetinkaya, A., Zhang, Y.Z., Hao, Y.M. and Ma, X.Y., Is FFBC Stock Buy or Sell?(Stock Forecast). AC Investment Research Journal, 101(3).
  3. Chernozhukov V, Newey W, Robins J. 2018c. Double/de-biased machine learning using regularized Riesz representers. arXiv:1802.08667 [stat.ML]
  4. A. Tamar and S. Mannor. Variance adjusted actor critic algorithms. arXiv preprint arXiv:1310.3697, 2013.
  5. E. Collins. Using Markov decision processes to optimize a nonlinear functional of the final distribution, with manufacturing applications. In Stochastic Modelling in Innovative Manufacturing, pages 30–45. Springer, 1997
  6. G. J. Laurent, L. Matignon, and N. L. Fort-Piat. The world of independent learners is not Markovian. Int. J. Know.-Based Intell. Eng. Syst., 15(1):55–64, 2011
  7. Breusch, T. S. A. R. Pagan (1979), "A simple test for heteroskedasticity and random coefficient variation," Econometrica, 47, 1287–1294.
Frequently Asked QuestionsQ: What is the prediction methodology for PCG^H stock?
A: PCG^H stock prediction methodology: We evaluate the prediction models Modular Neural Network (CNN Layer) and Sign Test
Q: Is PCG^H stock a buy or sell?
A: The dominant strategy among neural network is to Buy PCG^H Stock.
Q: Is Pacific Gas & Electric Co. 4.50% 1st Preferred Stock stock a good investment?
A: The consensus rating for Pacific Gas & Electric Co. 4.50% 1st Preferred Stock is Buy and assigned short-term Ba1 & long-term Ba1 estimated rating.
Q: What is the consensus rating of PCG^H stock?
A: The consensus rating for PCG^H is Buy.
Q: What is the prediction period for PCG^H stock?
A: The prediction period for PCG^H is (n+3 month)

Premium

  • Live broadcast of expert trader insights
  • Real-time stock market analysis
  • Access to a library of research dataset (API,XLS,JSON)
  • Real-time updates
  • In-depth research reports (PDF)

Login
This project is licensed under the license; additional terms may apply.