AC Investment Research

WMG Warner Music Group Corp. Class A Common Stock Research Report

Outlook: Warner Music Group Corp. Class A Common Stock assigned short-term Ba1 & long-term Ba1 estimated rating.
Dominant Strategy : Sell
Time series to forecast n: 29 Dec 2022 for (n+8 weeks)
Methodology : Modular Neural Network (Market News Sentiment Analysis)

Abstract

Stocks are possibly the most popular financial instrument invented for building wealth and are the centerpiece of any investment portfolio. The advances in trading technology has opened up the markets so that nowadays nearly anybody can own stocks. From last few decades, there seen explosive increase in the average person's interest for stock market. In a financially explosive market, as the stock market, it is important to have a very accurate prediction of a future trend. Because of the financial crisis and recording profits, it is compulsory to have a secure prediction of the values of the stocks. Predicting a non-linear signal requires progressive algorithms of machine learning with help of Artificial Intelligence (AI).(Sureshkumar, K.K. and Elango, N.M., 2012. Performance analysis of stock price prediction using artificial neural network. Global journal of computer science and Technology.) We evaluate Warner Music Group Corp. Class A Common Stock prediction models with Modular Neural Network (Market News Sentiment Analysis) and Statistical Hypothesis Testing1,2,3,4 and conclude that the WMG stock is predictable in the short/long term. According to price forecasts for (n+8 weeks) period, the dominant strategy among neural network is: Sell

Key Points

  1. What are the most successful trading algorithms?
  2. Is Target price a good indicator?
  3. What is the best way to predict stock prices?

WMG Target Price Prediction Modeling Methodology

We consider Warner Music Group Corp. Class A Common Stock Decision Process with Modular Neural Network (Market News Sentiment Analysis) where A is the set of discrete actions of WMG 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(Statistical Hypothesis Testing)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 (Market News Sentiment Analysis)) X S(n):→ (n+8 weeks) R = r 1 r 2 r 3

n:Time series to forecast

p:Price signals of WMG 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?

WMG Stock Forecast (Buy or Sell) for (n+8 weeks)

Sample Set: Neural Network
Stock/Index: WMG Warner Music Group Corp. Class A Common Stock
Time series to forecast n: 29 Dec 2022 for (n+8 weeks)

According to price forecasts for (n+8 weeks) period, the dominant strategy among neural network is: Sell

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 Warner Music Group Corp. Class A Common Stock

  1. An entity is not required to restate prior periods to reflect the application of these amendments. The entity may restate prior periods only if it is possible to do so without the use of hindsight. If an entity restates prior periods, the restated financial statements must reflect all the requirements in this Standard for the affected financial instruments. If an entity does not restate prior periods, the entity shall recognise any difference between the previous carrying amount and the carrying amount at the beginning of the annual reporting period that includes the date of initial application of these amendments in the opening retained earnings (or other component of equity, as appropriate) of the annual reporting period that includes the date of initial application of these amendments.
  2. The fact that a derivative is in or out of the money when it is designated as a hedging instrument does not in itself mean that a qualitative assessment is inappropriate. It depends on the circumstances whether hedge ineffectiveness arising from that fact could have a magnitude that a qualitative assessment would not adequately capture.
  3. To the extent that a transfer of a financial asset does not qualify for derecognition, the transferor's contractual rights or obligations related to the transfer are not accounted for separately as derivatives if recognising both the derivative and either the transferred asset or the liability arising from the transfer would result in recognising the same rights or obligations twice. For example, a call option retained by the transferor may prevent a transfer of financial assets from being accounted for as a sale. In that case, the call option is not separately recognised as a derivative asset.
  4. Unless paragraph 6.8.8 applies, for a hedge of a non-contractually specified benchmark component of interest rate risk, an entity shall apply the requirement in paragraphs 6.3.7(a) and B6.3.8—that the risk component shall be separately identifiable—only at the inception of the hedging relationship.

*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

Warner Music Group Corp. Class A Common Stock assigned short-term Ba1 & long-term Ba1 estimated rating. We evaluate the prediction models Modular Neural Network (Market News Sentiment Analysis) with Statistical Hypothesis Testing1,2,3,4 and conclude that the WMG stock is predictable in the short/long term. According to price forecasts for (n+8 weeks) period, the dominant strategy among neural network is: Sell

WMG Warner Music Group Corp. Class A Common Stock Financial Analysis*

Rating Short-Term Long-Term Senior
Outlook*Ba1Ba1
Income StatementB2Caa2
Balance SheetB3Caa2
Leverage RatiosB2Caa2
Cash FlowBaa2C
Rates of Return and ProfitabilityBaa2Baa2

*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: 83 out of 100 with 712 signals.

References

  1. Çetinkaya, A., Zhang, Y.Z., Hao, Y.M. and Ma, X.Y., Can neural networks predict stock market?(ATVI Stock Forecast). AC Investment Research Journal, 101(3).
  2. V. Borkar and R. Jain. Risk-constrained Markov decision processes. IEEE Transaction on Automatic Control, 2014
  3. Breiman L. 1993. Better subset selection using the non-negative garotte. Tech. Rep., Univ. Calif., Berkeley
  4. P. Milgrom and I. Segal. Envelope theorems for arbitrary choice sets. Econometrica, 70(2):583–601, 2002
  5. Mikolov T, Chen K, Corrado GS, Dean J. 2013a. Efficient estimation of word representations in vector space. arXiv:1301.3781 [cs.CL]
  6. D. Bertsekas. Dynamic programming and optimal control. Athena Scientific, 1995.
  7. V. Borkar and R. Jain. Risk-constrained Markov decision processes. IEEE Transaction on Automatic Control, 2014
Frequently Asked QuestionsQ: What is the prediction methodology for WMG stock?
A: WMG stock prediction methodology: We evaluate the prediction models Modular Neural Network (Market News Sentiment Analysis) and Statistical Hypothesis Testing
Q: Is WMG stock a buy or sell?
A: The dominant strategy among neural network is to Sell WMG Stock.
Q: Is Warner Music Group Corp. Class A Common Stock stock a good investment?
A: The consensus rating for Warner Music Group Corp. Class A Common Stock is Sell and assigned short-term Ba1 & long-term Ba1 estimated rating.
Q: What is the consensus rating of WMG stock?
A: The consensus rating for WMG is Sell.
Q: What is the prediction period for WMG stock?
A: The prediction period for WMG is (n+8 weeks)

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