Modelling A.I. in Economics

LON:RCDO RICARDO PLC (Forecast)

Outlook: RICARDO PLC is assigned short-term Ba1 & long-term Ba1 estimated rating.
Dominant Strategy : Buy
Time series to forecast n: 07 Jan 2023 for (n+3 month)
Methodology : Modular Neural Network (CNN Layer)

Abstract

RICARDO PLC prediction model is evaluated with Modular Neural Network (CNN Layer) and Ridge Regression1,2,3,4 and it is concluded that the LON:RCDO stock is predictable in the short/long term. According to price forecasts for (n+3 month) period, the dominant strategy among neural network is: Buy

Key Points

  1. How accurate is machine learning in stock market?
  2. Which neural network is best for prediction?
  3. Can neural networks predict stock market?

LON:RCDO Target Price Prediction Modeling Methodology

We consider RICARDO PLC Decision Process with Modular Neural Network (CNN Layer) where A is the set of discrete actions of LON:RCDO 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(Ridge 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(Modular Neural Network (CNN Layer)) X S(n):→ (n+3 month) i = 1 n s i

n:Time series to forecast

p:Price signals of LON:RCDO 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?

LON:RCDO Stock Forecast (Buy or Sell) for (n+3 month)

Sample Set: Neural Network
Stock/Index: LON:RCDO RICARDO PLC
Time series to forecast n: 07 Jan 2023 for (n+3 month)

According to price forecasts for (n+3 month) 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 RICARDO PLC

  1. IFRS 17, issued in May 2017, amended paragraphs 2.1, B2.1, B2.4, B2.5 and B4.1.30, and added paragraph 3.3.5. Amendments to IFRS 17, issued in June 2020, further amended paragraph 2.1 and added paragraphs 7.2.36‒7.2.42. An entity shall apply those amendments when it applies IFRS 17.
  2. An example of a fair value hedge is a hedge of exposure to changes in the fair value of a fixed-rate debt instrument arising from changes in interest rates. Such a hedge could be entered into by the issuer or by the holder.
  3. When using historical credit loss experience in estimating expected credit losses, it is important that information about historical credit loss rates is applied to groups that are defined in a manner that is consistent with the groups for which the historical credit loss rates were observed. Consequently, the method used shall enable each group of financial assets to be associated with information about past credit loss experience in groups of financial assets with similar risk characteristics and with relevant observable data that reflects current conditions.
  4. 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

*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

RICARDO PLC is assigned short-term Ba1 & long-term Ba1 estimated rating. RICARDO PLC prediction model is evaluated with Modular Neural Network (CNN Layer) and Ridge Regression1,2,3,4 and it is concluded that the LON:RCDO stock is predictable in the short/long term. According to price forecasts for (n+3 month) period, the dominant strategy among neural network is: Buy

LON:RCDO RICARDO PLC Financial Analysis*

Rating Short-Term Long-Term Senior
Outlook*Ba1Ba1
Income StatementCCaa2
Balance SheetBaa2Ba3
Leverage RatiosB2C
Cash FlowB2Baa2
Rates of Return and ProfitabilityBaa2Caa2

*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: 77 out of 100 with 743 signals.

References

  1. Burgess, D. F. (1975), "Duality theory and pitfalls in the specification of technologies," Journal of Econometrics, 3, 105–121.
  2. Dudik M, Langford J, Li L. 2011. Doubly robust policy evaluation and learning. In Proceedings of the 28th International Conference on Machine Learning, pp. 1097–104. La Jolla, CA: Int. Mach. Learn. Soc.
  3. Imbens GW, Lemieux T. 2008. Regression discontinuity designs: a guide to practice. J. Econom. 142:615–35
  4. D. Bertsekas and J. Tsitsiklis. Neuro-dynamic programming. Athena Scientific, 1996.
  5. Breusch, T. S. A. R. Pagan (1979), "A simple test for heteroskedasticity and random coefficient variation," Econometrica, 47, 1287–1294.
  6. Zeileis A, Hothorn T, Hornik K. 2008. Model-based recursive partitioning. J. Comput. Graph. Stat. 17:492–514 Zhou Z, Athey S, Wager S. 2018. Offline multi-action policy learning: generalization and optimization. arXiv:1810.04778 [stat.ML]
  7. 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).
Frequently Asked QuestionsQ: What is the prediction methodology for LON:RCDO stock?
A: LON:RCDO stock prediction methodology: We evaluate the prediction models Modular Neural Network (CNN Layer) and Ridge Regression
Q: Is LON:RCDO stock a buy or sell?
A: The dominant strategy among neural network is to Buy LON:RCDO Stock.
Q: Is RICARDO PLC stock a good investment?
A: The consensus rating for RICARDO PLC is Buy and is assigned short-term Ba1 & long-term Ba1 estimated rating.
Q: What is the consensus rating of LON:RCDO stock?
A: The consensus rating for LON:RCDO is Buy.
Q: What is the prediction period for LON:RCDO stock?
A: The prediction period for LON:RCDO is (n+3 month)

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