AC Investment Research

BMO:TSX Bank of Montreal Research Report

Outlook: Bank of Montreal is assigned short-term Ba1 & long-term Ba1 estimated rating.
Dominant Strategy : Buy
Time series to forecast n: 08 Jan 2023 for (n+16 weeks)
Methodology : Modular Neural Network (Emotional Trigger/Responses Analysis)

Abstract

Bank of Montreal prediction model is evaluated with Modular Neural Network (Emotional Trigger/Responses Analysis) and Spearman Correlation1,2,3,4 and it is concluded that the BMO:TSX stock is predictable in the short/long term. According to price forecasts for (n+16 weeks) period, the dominant strategy among neural network is: Buy

Key Points

  1. Dominated Move
  2. Is now good time to invest?
  3. What are main components of Markov decision process?

BMO:TSX Target Price Prediction Modeling Methodology

We consider Bank of Montreal Decision Process with Modular Neural Network (Emotional Trigger/Responses Analysis) where A is the set of discrete actions of BMO:TSX 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(Spearman Correlation)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 (Emotional Trigger/Responses Analysis)) X S(n):→ (n+16 weeks) R = 1 0 0 0 1 0 0 0 1

n:Time series to forecast

p:Price signals of BMO:TSX 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?

BMO:TSX Stock Forecast (Buy or Sell) for (n+16 weeks)

Sample Set: Neural Network
Stock/Index: BMO:TSX Bank of Montreal
Time series to forecast n: 08 Jan 2023 for (n+16 weeks)

According to price forecasts for (n+16 weeks) period, the dominant strategy among neural network is: Buy

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 Bank of Montreal

  1. An entity may retain the right to a part of the interest payments on transferred assets as compensation for servicing those assets. The part of the interest payments that the entity would give up upon termination or transfer of the servicing contract is allocated to the servicing asset or servicing liability. The part of the interest payments that the entity would not give up is an interest-only strip receivable. For example, if the entity would not give up any interest upon termination or transfer of the servicing contract, the entire interest spread is an interest-only strip receivable. For the purposes of applying paragraph 3.2.13, the fair values of the servicing asset and interest-only strip receivable are used to allocate the carrying amount of the receivable between the part of the asset that is derecognised and the part that continues to be recognised. If there is no servicing fee specified or the fee to be received is not expected to compensate the entity adequately for performing the servicing, a liability for the servicing obligation is recognised at fair value.
  2. For the purposes of applying the requirement in paragraph 5.7.7(a), credit risk is different from asset-specific performance risk. Asset-specific performance risk is not related to the risk that an entity will fail to discharge a particular obligation but instead it is related to the risk that a single asset or a group of assets will perform poorly (or not at all).
  3. For lifetime expected credit losses, an entity shall estimate the risk of a default occurring on the financial instrument during its expected life. 12-month expected credit losses are a portion of the lifetime expected credit losses and represent the lifetime cash shortfalls that will result if a default occurs in the 12 months after the reporting date (or a shorter period if the expected life of a financial instrument is less than 12 months), weighted by the probability of that default occurring. Thus, 12-month expected credit losses are neither the lifetime expected credit losses that an entity will incur on financial instruments that it predicts will default in the next 12 months nor the cash shortfalls that are predicted over the next 12 months.
  4. An entity shall amend a hedging relationship as required in paragraph 6.9.1 by the end of the reporting period during which a change required by interest rate benchmark reform is made to the hedged risk, hedged item or hedging instrument. For the avoidance of doubt, such an amendment to the formal designation of a hedging relationship constitutes neither the discontinuation of the hedging relationship nor the designation of a new 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

Bank of Montreal is assigned short-term Ba1 & long-term Ba1 estimated rating. Bank of Montreal prediction model is evaluated with Modular Neural Network (Emotional Trigger/Responses Analysis) and Spearman Correlation1,2,3,4 and it is concluded that the BMO:TSX stock is predictable in the short/long term. According to price forecasts for (n+16 weeks) period, the dominant strategy among neural network is: Buy

BMO:TSX Bank of Montreal Financial Analysis*

Rating Short-Term Long-Term Senior
Outlook*Ba1Ba1
Income StatementBaa2Ba3
Balance SheetBaa2Baa2
Leverage RatiosCB1
Cash FlowB2Caa2
Rates of Return and ProfitabilityCB3

*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: 86 out of 100 with 673 signals.

References

  1. F. A. Oliehoek and C. Amato. A Concise Introduction to Decentralized POMDPs. SpringerBriefs in Intelligent Systems. Springer, 2016
  2. Çetinkaya, A., Zhang, Y.Z., Hao, Y.M. and Ma, X.Y., Can stock prices be predicted?(SMI Index Stock Forecast). AC Investment Research Journal, 101(3).
  3. Gentzkow M, Kelly BT, Taddy M. 2017. Text as data. NBER Work. Pap. 23276
  4. G. Konidaris, S. Osentoski, and P. Thomas. Value function approximation in reinforcement learning using the Fourier basis. In AAAI, 2011
  5. Swaminathan A, Joachims T. 2015. Batch learning from logged bandit feedback through counterfactual risk minimization. J. Mach. Learn. Res. 16:1731–55
  6. Batchelor, R. P. Dua (1993), "Survey vs ARCH measures of inflation uncertainty," Oxford Bulletin of Economics Statistics, 55, 341–353.
  7. Bai J, Ng S. 2002. Determining the number of factors in approximate factor models. Econometrica 70:191–221
Frequently Asked QuestionsQ: What is the prediction methodology for BMO:TSX stock?
A: BMO:TSX stock prediction methodology: We evaluate the prediction models Modular Neural Network (Emotional Trigger/Responses Analysis) and Spearman Correlation
Q: Is BMO:TSX stock a buy or sell?
A: The dominant strategy among neural network is to Buy BMO:TSX Stock.
Q: Is Bank of Montreal stock a good investment?
A: The consensus rating for Bank of Montreal is Buy and is assigned short-term Ba1 & long-term Ba1 estimated rating.
Q: What is the consensus rating of BMO:TSX stock?
A: The consensus rating for BMO:TSX is Buy.
Q: What is the prediction period for BMO:TSX stock?
A: The prediction period for BMO:TSX is (n+16 weeks)

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