AC Investment Research

SO Southern Company (The) Common Stock Research Report

Outlook: Southern Company (The) Common Stock assigned short-term B1 & long-term B2 forecasted stock rating.
Dominant Strategy : Hold
Time series to forecast n: 10 Dec 2022 for (n+1 year)
Methodology : Deductive Inference (ML)

Abstract

Stock market also called as equity market is the aggregation of the sellers and buyers. It is concerned with the domain where the shares of various public listed companies are traded. For predicting the growth of economy, stock market acts as an index. Due to the nonlinear nature, the prediction of the stock market becomes a difficult task. But the application of various machine learning techniques has been becoming a powerful source for the prediction.(Singh, R. and Srivastava, S., 2017. Stock prediction using deep learning. Multimedia Tools and Applications, 76(18), pp.18569-18584.) We evaluate Southern Company (The) Common Stock prediction models with Deductive Inference (ML) and Multiple Regression1,2,3,4 and conclude that the SO stock is predictable in the short/long term. According to price forecasts for (n+1 year) period, the dominant strategy among neural network is: Hold

Key Points

  1. Reaction Function
  2. Trading Interaction
  3. Reaction Function

SO Target Price Prediction Modeling Methodology

We consider Southern Company (The) Common Stock Decision Process with Deductive Inference (ML) where A is the set of discrete actions of SO 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(Multiple 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(Deductive Inference (ML)) X S(n):→ (n+1 year) r s rs

n:Time series to forecast

p:Price signals of SO 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?

SO Stock Forecast (Buy or Sell) for (n+1 year)

Sample Set: Neural Network
Stock/Index: SO Southern Company (The) Common Stock
Time series to forecast n: 10 Dec 2022 for (n+1 year)

According to price forecasts for (n+1 year) 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 Southern Company (The) Common Stock

  1. If a collar, in the form of a purchased call and written put, prevents a transferred asset from being derecognised and the entity measures the asset at fair value, it continues to measure the asset at fair value. The associated liability is measured at (i) the sum of the call exercise price and fair value of the put option less the time value of the call option, if the call option is in or at the money, or (ii) the sum of the fair value of the asset and the fair value of the put option less the time value of the call option if the call option is out of the money. The adjustment to the associated liability ensures that the net carrying amount of the asset and the associated liability is the fair value of the options held and written by the entity. For example, assume an entity transfers a financial asset that is measured at fair value while simultaneously purchasing a call with an exercise price of CU120 and writing a put with an exercise price of CU80. Assume also that the fair value of the asset is CU100 at the date of the transfer. The time value of the put and call are CU1 and CU5 respectively. In this case, the entity recognises an asset of CU100 (the fair value of the asset) and a liability of CU96 [(CU100 + CU1) – CU5]. This gives a net asset value of CU4, which is the fair value of the options held and written by the entity.
  2. At the date of initial application, an entity is permitted to make the designation in paragraph 2.5 for contracts that already exist on the date but only if it designates all similar contracts. The change in the net assets resulting from such designations shall be recognised in retained earnings at the date of initial application.
  3. In applying the effective interest method, an entity identifies fees that are an integral part of the effective interest rate of a financial instrument. The description of fees for financial services may not be indicative of the nature and substance of the services provided. Fees that are an integral part of the effective interest rate of a financial instrument are treated as an adjustment to the effective interest rate, unless the financial instrument is measured at fair value, with the change in fair value being recognised in profit or loss. In those cases, the fees are recognised as revenue or expense when the instrument is initially recognised.
  4. For the purpose of applying paragraphs B4.1.11(b) and B4.1.12(b), irrespective of the event or circumstance that causes the early termination of the contract, a party may pay or receive reasonable compensation for that early termination. For example, a party may pay or receive reasonable compensation when it chooses to terminate the contract early (or otherwise causes the early termination to occur).

*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

Southern Company (The) Common Stock assigned short-term B1 & long-term B2 forecasted stock rating. We evaluate the prediction models Deductive Inference (ML) with Multiple Regression1,2,3,4 and conclude that the SO stock is predictable in the short/long term. According to price forecasts for (n+1 year) period, the dominant strategy among neural network is: Hold

Financial State Forecast for SO Southern Company (The) Common Stock Options & Futures

Rating Short-Term Long-Term Senior
Outlook*B1B2
Operational Risk 7473
Market Risk5037
Technical Analysis6469
Fundamental Analysis6250
Risk Unsystematic5137

Prediction Confidence Score

Trust metric by Neural Network: 86 out of 100 with 458 signals.

References

  1. Barrett, C. B. (1997), "Heteroscedastic price forecasting for food security management in developing countries," Oxford Development Studies, 25, 225–236.
  2. E. Altman, K. Avrachenkov, and R. N ́u ̃nez-Queija. Perturbation analysis for denumerable Markov chains with application to queueing models. Advances in Applied Probability, pages 839–853, 2004
  3. Çetinkaya, A., Zhang, Y.Z., Hao, Y.M. and Ma, X.Y., Short/Long Term Stocks: FOX Stock Forecast. AC Investment Research Journal, 101(3).
  4. Dudik M, Erhan D, Langford J, Li L. 2014. Doubly robust policy evaluation and optimization. Stat. Sci. 29:485–511
  5. O. Bardou, N. Frikha, and G. Pag`es. Computing VaR and CVaR using stochastic approximation and adaptive unconstrained importance sampling. Monte Carlo Methods and Applications, 15(3):173–210, 2009.
  6. Z. Wang, T. Schaul, M. Hessel, H. van Hasselt, M. Lanctot, and N. de Freitas. Dueling network architectures for deep reinforcement learning. In Proceedings of the International Conference on Machine Learning (ICML), pages 1995–2003, 2016.
  7. Athey S, Imbens G, Wager S. 2016a. Efficient inference of average treatment effects in high dimensions via approximate residual balancing. arXiv:1604.07125 [math.ST]
Frequently Asked QuestionsQ: What is the prediction methodology for SO stock?
A: SO stock prediction methodology: We evaluate the prediction models Deductive Inference (ML) and Multiple Regression
Q: Is SO stock a buy or sell?
A: The dominant strategy among neural network is to Hold SO Stock.
Q: Is Southern Company (The) Common Stock stock a good investment?
A: The consensus rating for Southern Company (The) Common Stock is Hold and assigned short-term B1 & long-term B2 forecasted stock rating.
Q: What is the consensus rating of SO stock?
A: The consensus rating for SO is Hold.
Q: What is the prediction period for SO stock?
A: The prediction period for SO is (n+1 year)

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