Modelling A.I. in Economics

PNR Pentair plc. Ordinary Share (Forecast)

Outlook: Pentair plc. Ordinary Share assigned short-term B3 & long-term B1 forecasted stock rating.
Dominant Strategy : Hold
Time series to forecast n: 14 Dec 2022 for (n+6 month)
Methodology : Active Learning (ML)

Abstract

Neural networks, as an intelligent data mining method, have been used in many different challenging pattern recognition problems such as stock market prediction. However, there is no formal method to determine the optimal neural network for prediction purpose in the literature. In this paper, two kinds of neural networks, a feed forward multi layer Perceptron (MLP) and an Elman recurrent network, are used to predict a company's stock value based on its stock share value history.(Chou, J.S. and Nguyen, T.K., 2018. Forward forecast of stock price using sliding-window metaheuristic-optimized machine-learning regression. IEEE Transactions on Industrial Informatics, 14(7), pp.3132-3142.) We evaluate Pentair plc. Ordinary Share prediction models with Active Learning (ML) and Wilcoxon Rank-Sum Test1,2,3,4 and conclude that the PNR 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. Buy, Sell and Hold Signals
  2. Can statistics predict the future?
  3. How do you know when a stock will go up or down?

PNR Target Price Prediction Modeling Methodology

We consider Pentair plc. Ordinary Share Decision Process with Active Learning (ML) where A is the set of discrete actions of PNR 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(Wilcoxon Rank-Sum 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(Active Learning (ML)) 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 PNR 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?

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

Sample Set: Neural Network
Stock/Index: PNR Pentair plc. Ordinary Share
Time series to forecast n: 14 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%

Adjusted IFRS* Prediction Methods for Pentair plc. Ordinary Share

  1. If a component of the cash flows of a financial or a non-financial item is designated as the hedged item, that component must be less than or equal to the total cash flows of the entire item. However, all of the cash flows of the entire item may be designated as the hedged item and hedged for only one particular risk (for example, only for those changes that are attributable to changes in LIBOR or a benchmark commodity price).
  2. For a financial guarantee contract, the entity is required to make payments only in the event of a default by the debtor in accordance with the terms of the instrument that is guaranteed. Accordingly, cash shortfalls are the expected payments to reimburse the holder for a credit loss that it incurs less any amounts that the entity expects to receive from the holder, the debtor or any other party. If the asset is fully guaranteed, the estimation of cash shortfalls for a financial guarantee contract would be consistent with the estimations of cash shortfalls for the asset subject to the guarantee
  3. To calculate the change in the value of the hedged item for the purpose of measuring hedge ineffectiveness, an entity may use a derivative that would have terms that match the critical terms of the hedged item (this is commonly referred to as a 'hypothetical derivative'), and, for example for a hedge of a forecast transaction, would be calibrated using the hedged price (or rate) level. For example, if the hedge was for a two-sided risk at the current market level, the hypothetical derivative would represent a hypothetical forward contract that is calibrated to a value of nil at the time of designation of the hedging relationship. If the hedge was for example for a one-sided risk, the hypothetical derivative would represent the intrinsic value of a hypothetical option that at the time of designation of the hedging relationship is at the money if the hedged price level is the current market level, or out of the money if the hedged price level is above (or, for a hedge of a long position, below) the current market level. Using a hypothetical derivative is one possible way of calculating the change in the value of the hedged item. The hypothetical derivative replicates the hedged item and hence results in the same outcome as if that change in value was determined by a different approach. Hence, using a 'hypothetical derivative' is not a method in its own right but a mathematical expedient that can only be used to calculate the value of the hedged item. Consequently, a 'hypothetical derivative' cannot be used to include features in the value of the hedged item that only exist in the hedging instrument (but not in the hedged item). An example is debt denominated in a foreign currency (irrespective of whether it is fixed-rate or variable-rate debt). When using a hypothetical derivative to calculate the change in the value of such debt or the present value of the cumulative change in its cash flows, the hypothetical derivative cannot simply impute a charge for exchanging different currencies even though actual derivatives under which different currencies are exchanged might include such a charge (for example, cross-currency interest rate swaps).
  4. Such designation may be used whether paragraph 4.3.3 requires the embedded derivatives to be separated from the host contract or prohibits such separation. However, paragraph 4.3.5 would not justify designating the hybrid contract as at fair value through profit or loss in the cases set out in paragraph 4.3.5(a) and (b) because doing so would not reduce complexity or increase reliability.

*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

Pentair plc. Ordinary Share assigned short-term B3 & long-term B1 forecasted stock rating. We evaluate the prediction models Active Learning (ML) with Wilcoxon Rank-Sum Test1,2,3,4 and conclude that the PNR 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

Financial State Forecast for PNR Pentair plc. Ordinary Share Options & Futures

Rating Short-Term Long-Term Senior
Outlook*B3B1
Operational Risk 3255
Market Risk4339
Technical Analysis4075
Fundamental Analysis8549
Risk Unsystematic5879

Prediction Confidence Score

Trust metric by Neural Network: 75 out of 100 with 698 signals.

References

  1. R. Sutton and A. Barto. Reinforcement Learning. The MIT Press, 1998
  2. S. J. Russell and A. Zimdars. Q-decomposition for reinforcement learning agents. In Machine Learning, Proceedings of the Twentieth International Conference (ICML 2003), August 21-24, 2003, Washington, DC, USA, pages 656–663, 2003.
  3. Knox SW. 2018. Machine Learning: A Concise Introduction. Hoboken, NJ: Wiley
  4. 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
  5. Breiman L. 1993. Better subset selection using the non-negative garotte. Tech. Rep., Univ. Calif., Berkeley
  6. T. Shardlow and A. Stuart. A perturbation theory for ergodic Markov chains and application to numerical approximations. SIAM journal on numerical analysis, 37(4):1120–1137, 2000
  7. Scott SL. 2010. A modern Bayesian look at the multi-armed bandit. Appl. Stoch. Models Bus. Ind. 26:639–58
Frequently Asked QuestionsQ: What is the prediction methodology for PNR stock?
A: PNR stock prediction methodology: We evaluate the prediction models Active Learning (ML) and Wilcoxon Rank-Sum Test
Q: Is PNR stock a buy or sell?
A: The dominant strategy among neural network is to Hold PNR Stock.
Q: Is Pentair plc. Ordinary Share stock a good investment?
A: The consensus rating for Pentair plc. Ordinary Share is Hold and assigned short-term B3 & long-term B1 forecasted stock rating.
Q: What is the consensus rating of PNR stock?
A: The consensus rating for PNR is Hold.
Q: What is the prediction period for PNR stock?
A: The prediction period for PNR is (n+6 month)

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