Modelling A.I. in Economics

PFO Flaherty & Crumrine Preferred and Income Opportunity Fund Incorporated

Outlook: Flaherty & Crumrine Preferred and Income Opportunity Fund Incorporated assigned short-term Ba1 & long-term Ba1 estimated rating.
Dominant Strategy : Hold
Time series to forecast n: 19 Dec 2022 for (n+6 month)
Methodology : Modular Neural Network (CNN Layer)

Abstract

In recent years there has been a significant growth of interest in the incorporation of historical series of variables related to stock prediction into mathematical models or computational algorithms in order to generate predictions or indications about expected price movements.(Torres P, E.P., Hernández-Álvarez, M., Torres Hernández, E.A. and Yoo, S.G., 2019, February. Stock market data prediction using machine learning techniques. In International conference on information technology & systems (pp. 539-547). Springer, Cham.) We evaluate Flaherty & Crumrine Preferred and Income Opportunity Fund Incorporated prediction models with Modular Neural Network (CNN Layer) and Logistic Regression1,2,3,4 and conclude that the PFO stock is predictable in the short/long term. According to price forecasts for (n+6 month) period, the dominant strategy among neural network is: Hold

Key Points

  1. How do you know when a stock will go up or down?
  2. Fundemental Analysis with Algorithmic Trading
  3. What is prediction in deep learning?

PFO Target Price Prediction Modeling Methodology

We consider Flaherty & Crumrine Preferred and Income Opportunity Fund Incorporated Decision Process with Modular Neural Network (CNN Layer) where A is the set of discrete actions of PFO 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(Logistic 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 (CNN Layer)) X S(n):→ (n+6 month) i = 1 n a i

n:Time series to forecast

p:Price signals of PFO 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?

PFO Stock Forecast (Buy or Sell) for (n+6 month)

Sample Set: Neural Network
Stock/Index: PFO Flaherty & Crumrine Preferred and Income Opportunity Fund Incorporated
Time series to forecast n: 19 Dec 2022 for (n+6 month)

According to price forecasts for (n+6 month) 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%

IFRS Reconciliation Adjustments for Flaherty & Crumrine Preferred and Income Opportunity Fund Incorporated

  1. Paragraph 5.7.5 permits an entity to make an irrevocable election to present in other comprehensive income changes in the fair value of an investment in an equity instrument that is not held for trading. This election is made on an instrument-by-instrument (ie share-by-share) basis. Amounts presented in other comprehensive income shall not be subsequently transferred to profit or loss. However, the entity may transfer the cumulative gain or loss within equity. Dividends on such investments are recognised in profit or loss in accordance with paragraph 5.7.6 unless the dividend clearly represents a recovery of part of the cost of the investment.
  2. For example, when the critical terms (such as the nominal amount, maturity and underlying) of the hedging instrument and the hedged item match or are closely aligned, it might be possible for an entity to conclude on the basis of a qualitative assessment of those critical terms that the hedging instrument and the hedged item have values that will generally move in the opposite direction because of the same risk and hence that an economic relationship exists between the hedged item and the hedging instrument (see paragraphs B6.4.4–B6.4.6).
  3. When an entity first applies this Standard, it may choose as its accounting policy to continue to apply the hedge accounting requirements of IAS 39 instead of the requirements in Chapter 6 of this Standard. An entity shall apply that policy to all of its hedging relationships. An entity that chooses that policy shall also apply IFRIC 16 Hedges of a Net Investment in a Foreign Operation without the amendments that conform that Interpretation to the requirements in Chapter 6 of this Standard.
  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

Flaherty & Crumrine Preferred and Income Opportunity Fund Incorporated assigned short-term Ba1 & long-term Ba1 estimated rating. We evaluate the prediction models Modular Neural Network (CNN Layer) with Logistic Regression1,2,3,4 and conclude that the PFO stock is predictable in the short/long term. According to price forecasts for (n+6 month) period, the dominant strategy among neural network is: Hold

PFO Flaherty & Crumrine Preferred and Income Opportunity Fund Incorporated Financial Analysis*

Rating Short-Term Long-Term Senior
Outlook*Ba1Ba1
Income StatementBaa2Baa2
Balance SheetB3Caa2
Leverage RatiosB3C
Cash FlowBaa2Baa2
Rates of Return and ProfitabilityCaa2B3

*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: 79 out of 100 with 560 signals.

References

  1. Thompson WR. 1933. On the likelihood that one unknown probability exceeds another in view of the evidence of two samples. Biometrika 25:285–94
  2. Çetinkaya, A., Zhang, Y.Z., Hao, Y.M. and Ma, X.Y., MO Stock Price Prediction. AC Investment Research Journal, 101(3).
  3. F. A. Oliehoek and C. Amato. A Concise Introduction to Decentralized POMDPs. SpringerBriefs in Intelligent Systems. Springer, 2016
  4. R. Sutton and A. Barto. Introduction to reinforcement learning. MIT Press, 1998
  5. Çetinkaya, A., Zhang, Y.Z., Hao, Y.M. and Ma, X.Y., Tempur Sealy Stock Forecast & Analysis. AC Investment Research Journal, 101(3).
  6. Chow, G. C. (1960), "Tests of equality between sets of coefficients in two linear regressions," Econometrica, 28, 591–605.
  7. V. Borkar. A sensitivity formula for the risk-sensitive cost and the actor-critic algorithm. Systems & Control Letters, 44:339–346, 2001
Frequently Asked QuestionsQ: What is the prediction methodology for PFO stock?
A: PFO stock prediction methodology: We evaluate the prediction models Modular Neural Network (CNN Layer) and Logistic Regression
Q: Is PFO stock a buy or sell?
A: The dominant strategy among neural network is to Hold PFO Stock.
Q: Is Flaherty & Crumrine Preferred and Income Opportunity Fund Incorporated stock a good investment?
A: The consensus rating for Flaherty & Crumrine Preferred and Income Opportunity Fund Incorporated is Hold and assigned short-term Ba1 & long-term Ba1 estimated rating.
Q: What is the consensus rating of PFO stock?
A: The consensus rating for PFO is Hold.
Q: What is the prediction period for PFO stock?
A: The prediction period for PFO is (n+6 month)

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