AC Investment Research

PSX Phillips 66 Common Stock Research Report

Outlook: Phillips 66 Common Stock assigned short-term Ba1 & long-term Ba1 estimated rating.
Dominant Strategy : Hold
Time series to forecast n: 24 Dec 2022 for (n+16 weeks)
Methodology : Active Learning (ML)

Abstract

How to predict stock price movements based on quantitative market data modeling is an attractive topic. In front of the market news and stock prices that are commonly believed as two important market data sources, how to extract and exploit the hidden information within the raw data and make both accurate and fast predictions simultaneously becomes a challenging problem. In this paper, we present the design and architecture of our trading signal mining platform that employs extreme learning machine (ELM) to make stock price prediction based on those two data sources concurrently.(Kumar, D., Sarangi, P.K. and Verma, R., 2021. A systematic review of stock market prediction using machine learning and statistical techniques. Materials Today: Proceedings.) We evaluate Phillips 66 Common Stock prediction models with Active Learning (ML) and Stepwise Regression1,2,3,4 and conclude that the PSX 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. Can stock prices be predicted?
  2. Fundemental Analysis with Algorithmic Trading
  3. What is neural prediction?

PSX Target Price Prediction Modeling Methodology

We consider Phillips 66 Common Stock Decision Process with Active Learning (ML) where A is the set of discrete actions of PSX 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(Stepwise 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(Active Learning (ML)) X S(n):→ (n+16 weeks) r s rs

n:Time series to forecast

p:Price signals of PSX 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?

PSX Stock Forecast (Buy or Sell) for (n+16 weeks)

Sample Set: Neural Network
Stock/Index: PSX Phillips 66 Common Stock
Time series to forecast n: 24 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%

IFRS Reconciliation Adjustments for Phillips 66 Common Stock

  1. If the group of items does not have any offsetting risk positions (for example, a group of foreign currency expenses that affect different line items in the statement of profit or loss and other comprehensive income that are hedged for foreign currency risk) then the reclassified hedging instrument gains or losses shall be apportioned to the line items affected by the hedged items. This apportionment shall be done on a systematic and rational basis and shall not result in the grossing up of the net gains or losses arising from a single hedging instrument.
  2. An embedded prepayment option in an interest-only or principal-only strip is closely related to the host contract provided the host contract (i) initially resulted from separating the right to receive contractual cash flows of a financial instrument that, in and of itself, did not contain an embedded derivative, and (ii) does not contain any terms not present in the original host debt contract.
  3. 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
  4. When designating risk components as hedged items, an entity considers whether the risk components are explicitly specified in a contract (contractually specified risk components) or whether they are implicit in the fair value or the cash flows of an item of which they are a part (noncontractually specified risk components). Non-contractually specified risk components can relate to items that are not a contract (for example, forecast transactions) or contracts that do not explicitly specify the component (for example, a firm commitment that includes only one single price instead of a pricing formula that references different underlyings)

*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

Phillips 66 Common Stock assigned short-term Ba1 & long-term Ba1 estimated rating. We evaluate the prediction models Active Learning (ML) with Stepwise Regression1,2,3,4 and conclude that the PSX 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

PSX Phillips 66 Common Stock Financial Analysis*

Rating Short-Term Long-Term Senior
Outlook*Ba1Ba1
Income StatementCaa2Baa2
Balance SheetB3Baa2
Leverage RatiosBaa2B2
Cash FlowCaa2Caa2
Rates of Return and ProfitabilityBaa2B1

*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: 81 out of 100 with 740 signals.

References

  1. C. Szepesvári. Algorithms for Reinforcement Learning. Synthesis Lectures on Artificial Intelligence and Machine Learning. Morgan & Claypool Publishers, 2010
  2. Friedberg R, Tibshirani J, Athey S, Wager S. 2018. Local linear forests. arXiv:1807.11408 [stat.ML]
  3. 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
  4. Challen, D. W. A. J. Hagger (1983), Macroeconomic Systems: Construction, Validation and Applications. New York: St. Martin's Press.
  5. Athey S. 2017. Beyond prediction: using big data for policy problems. Science 355:483–85
  6. Matzkin RL. 2007. Nonparametric identification. In Handbook of Econometrics, Vol. 6B, ed. J Heckman, E Learner, pp. 5307–68. Amsterdam: Elsevier
  7. Çetinkaya, A., Zhang, Y.Z., Hao, Y.M. and Ma, X.Y., Is TPL a Buy?. AC Investment Research Journal, 101(3).
Frequently Asked QuestionsQ: What is the prediction methodology for PSX stock?
A: PSX stock prediction methodology: We evaluate the prediction models Active Learning (ML) and Stepwise Regression
Q: Is PSX stock a buy or sell?
A: The dominant strategy among neural network is to Hold PSX Stock.
Q: Is Phillips 66 Common Stock stock a good investment?
A: The consensus rating for Phillips 66 Common Stock is Hold and assigned short-term Ba1 & long-term Ba1 estimated rating.
Q: What is the consensus rating of PSX stock?
A: The consensus rating for PSX is Hold.
Q: What is the prediction period for PSX stock?
A: The prediction period for PSX is (n+16 weeks)

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