AC Investment Research

ARCE Arco Platform Limited Class A Common Shares Research Report

Outlook: Arco Platform Limited Class A Common Shares is assigned short-term Ba1 & long-term Ba1 estimated rating.
Dominant Strategy : Hold
Time series to forecast n: 16 Jan 2023 for (n+3 month)
Methodology : Deductive Inference (ML)

Abstract

Arco Platform Limited Class A Common Shares prediction model is evaluated with Deductive Inference (ML) and Linear Regression1,2,3,4 and it is concluded that the ARCE stock is predictable in the short/long term. According to price forecasts for (n+3 month) period, the dominant strategy among neural network is: Hold

Key Points

  1. What are the most successful trading algorithms?
  2. Prediction Modeling
  3. How can neural networks improve predictions?

ARCE Target Price Prediction Modeling Methodology

We consider Arco Platform Limited Class A Common Shares Decision Process with Deductive Inference (ML) where A is the set of discrete actions of ARCE 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(Linear 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+3 month) i = 1 n s i

n:Time series to forecast

p:Price signals of ARCE 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?

ARCE Stock Forecast (Buy or Sell) for (n+3 month)

Sample Set: Neural Network
Stock/Index: ARCE Arco Platform Limited Class A Common Shares
Time series to forecast n: 16 Jan 2023 for (n+3 month)

According to price forecasts for (n+3 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 Arco Platform Limited Class A Common Shares

  1. An entity's business model is determined at a level that reflects how groups of financial assets are managed together to achieve a particular business objective. The entity's business model does not depend on management's intentions for an individual instrument. Accordingly, this condition is not an instrument-by-instrument approach to classification and should be determined on a higher level of aggregation. However, a single entity may have more than one business model for managing its financial instruments. Consequently, classification need not be determined at the reporting entity level. For example, an entity may hold a portfolio of investments that it manages in order to collect contractual cash flows and another portfolio of investments that it manages in order to trade to realise fair value changes. Similarly, in some circumstances, it may be appropriate to separate a portfolio of financial assets into subportfolios in order to reflect the level at which an entity manages those financial assets. For example, that may be the case if an entity originates or purchases a portfolio of mortgage loans and manages some of the loans with an objective of collecting contractual cash flows and manages the other loans with an objective of selling them.
  2. The methods used to determine whether credit risk has increased significantly on a financial instrument since initial recognition should consider the characteristics of the financial instrument (or group of financial instruments) and the default patterns in the past for comparable financial instruments. Despite the requirement in paragraph 5.5.9, for financial instruments for which default patterns are not concentrated at a specific point during the expected life of the financial instrument, changes in the risk of a default occurring over the next 12 months may be a reasonable approximation of the changes in the lifetime risk of a default occurring. In such cases, an entity may use changes in the risk of a default occurring over the next 12 months to determine whether credit risk has increased significantly since initial recognition, unless circumstances indicate that a lifetime assessment is necessary
  3. The following are examples of when the objective of the entity's business model may be achieved by both collecting contractual cash flows and selling financial assets. This list of examples is not exhaustive. Furthermore, the examples are not intended to describe all the factors that may be relevant to the assessment of the entity's business model nor specify the relative importance of the factors.
  4. An entity's estimate of expected credit losses on loan commitments shall be consistent with its expectations of drawdowns on that loan commitment, ie it shall consider the expected portion of the loan commitment that will be drawn down within 12 months of the reporting date when estimating 12-month expected credit losses, and the expected portion of the loan commitment that will be drawn down over the expected life of the loan commitment when estimating lifetime expected credit losses.

*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

Arco Platform Limited Class A Common Shares is assigned short-term Ba1 & long-term Ba1 estimated rating. Arco Platform Limited Class A Common Shares prediction model is evaluated with Deductive Inference (ML) and Linear Regression1,2,3,4 and it is concluded that the ARCE stock is predictable in the short/long term. According to price forecasts for (n+3 month) period, the dominant strategy among neural network is: Hold

ARCE Arco Platform Limited Class A Common Shares Financial Analysis*

Rating Short-Term Long-Term Senior
Outlook*Ba1Ba1
Income StatementCaa2C
Balance SheetCBaa2
Leverage RatiosBaa2Ba2
Cash FlowB1Caa2
Rates of Return and ProfitabilityCaa2Caa2

*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: 78 out of 100 with 512 signals.

References

  1. Çetinkaya, A., Zhang, Y.Z., Hao, Y.M. and Ma, X.Y., Is TPL a Buy?. AC Investment Research Journal, 101(3).
  2. M. L. Littman. Friend-or-foe q-learning in general-sum games. In Proceedings of the Eighteenth International Conference on Machine Learning (ICML 2001), Williams College, Williamstown, MA, USA, June 28 - July 1, 2001, pages 322–328, 2001
  3. Firth JR. 1957. A synopsis of linguistic theory 1930–1955. In Studies in Linguistic Analysis (Special Volume of the Philological Society), ed. JR Firth, pp. 1–32. Oxford, UK: Blackwell
  4. Belsley, D. A. (1988), "Modelling and forecast reliability," International Journal of Forecasting, 4, 427–447.
  5. Burkov A. 2019. The Hundred-Page Machine Learning Book. Quebec City, Can.: Andriy Burkov
  6. Hastie T, Tibshirani R, Friedman J. 2009. The Elements of Statistical Learning. Berlin: Springer
  7. Abadie A, Cattaneo MD. 2018. Econometric methods for program evaluation. Annu. Rev. Econ. 10:465–503
Frequently Asked QuestionsQ: What is the prediction methodology for ARCE stock?
A: ARCE stock prediction methodology: We evaluate the prediction models Deductive Inference (ML) and Linear Regression
Q: Is ARCE stock a buy or sell?
A: The dominant strategy among neural network is to Hold ARCE Stock.
Q: Is Arco Platform Limited Class A Common Shares stock a good investment?
A: The consensus rating for Arco Platform Limited Class A Common Shares is Hold and is assigned short-term Ba1 & long-term Ba1 estimated rating.
Q: What is the consensus rating of ARCE stock?
A: The consensus rating for ARCE is Hold.
Q: What is the prediction period for ARCE stock?
A: The prediction period for ARCE is (n+3 month)

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