Modelling A.I. in Economics

GOOGL Alphabet Inc. Class A Common Stock

Outlook: Alphabet Inc. Class A Common Stock is assigned short-term Ba1 & long-term Ba1 estimated rating.
Dominant Strategy : Sell
Time series to forecast n: 21 Feb 2023 for (n+16 weeks)
Methodology : Reinforcement Machine Learning (ML)

Abstract

Alphabet Inc. Class A Common Stock prediction model is evaluated with Reinforcement Machine Learning (ML) and Statistical Hypothesis Testing1,2,3,4 and it is concluded that the GOOGL stock is predictable in the short/long term. According to price forecasts for (n+16 weeks) period, the dominant strategy among neural network is: Sell

Key Points

  1. What are main components of Markov decision process?
  2. What statistical methods are used to analyze data?
  3. Which neural network is best for prediction?

GOOGL Target Price Prediction Modeling Methodology

We consider Alphabet Inc. Class A Common Stock Decision Process with Reinforcement Machine Learning (ML) where A is the set of discrete actions of GOOGL 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(Reinforcement Machine Learning (ML)) X S(n):→ (n+16 weeks) R = r 1 r 2 r 3

n:Time series to forecast

p:Price signals of GOOGL 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?

GOOGL Stock Forecast (Buy or Sell) for (n+16 weeks)

Sample Set: Neural Network
Stock/Index: GOOGL Alphabet Inc. Class A Common Stock
Time series to forecast n: 21 Feb 2023 for (n+16 weeks)

According to price forecasts for (n+16 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 Alphabet Inc. Class A Common Stock

  1. When an entity discontinues measuring the financial instrument that gives rise to the credit risk, or a proportion of that financial instrument, at fair value through profit or loss, that financial instrument's fair value at the date of discontinuation becomes its new carrying amount. Subsequently, the same measurement that was used before designating the financial instrument at fair value through profit or loss shall be applied (including amortisation that results from the new carrying amount). For example, a financial asset that had originally been classified as measured at amortised cost would revert to that measurement and its effective interest rate would be recalculated based on its new gross carrying amount on the date of discontinuing measurement at fair value through profit or loss.
  2. Hedge effectiveness is the extent to which changes in the fair value or the cash flows of the hedging instrument offset changes in the fair value or the cash flows of the hedged item (for example, when the hedged item is a risk component, the relevant change in fair value or cash flows of an item is the one that is attributable to the hedged risk). Hedge ineffectiveness is the extent to which the changes in the fair value or the cash flows of the hedging instrument are greater or less than those on the hedged item.
  3. An entity can rebut this presumption. However, it can do so only when it has reasonable and supportable information available that demonstrates that even if contractual payments become more than 30 days past due, this does not represent a significant increase in the credit risk of a financial instrument. For example when non-payment was an administrative oversight, instead of resulting from financial difficulty of the borrower, or the entity has access to historical evidence that demonstrates that there is no correlation between significant increases in the risk of a default occurring and financial assets on which payments are more than 30 days past due, but that evidence does identify such a correlation when payments are more than 60 days past due.
  4. All investments in equity instruments and contracts on those instruments must be measured at fair value. However, in limited circumstances, cost may be an appropriate estimate of fair value. That may be the case if insufficient more recent information is available to measure fair value, or if there is a wide range of possible fair value measurements and cost represents the best estimate of fair value within that range.

*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

Alphabet Inc. Class A Common Stock is assigned short-term Ba1 & long-term Ba1 estimated rating. Alphabet Inc. Class A Common Stock prediction model is evaluated with Reinforcement Machine Learning (ML) and Statistical Hypothesis Testing1,2,3,4 and it is concluded that the GOOGL stock is predictable in the short/long term. According to price forecasts for (n+16 weeks) period, the dominant strategy among neural network is: Sell

GOOGL Alphabet Inc. Class A Common Stock Financial Analysis*

Rating Short-Term Long-Term Senior
Outlook*Ba1Ba1
Income StatementBaa2Baa2
Balance SheetB2Ba3
Leverage RatiosBaa2Baa2
Cash FlowCBaa2
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: 79 out of 100 with 459 signals.

References

  1. M. J. Hausknecht and P. Stone. Deep recurrent Q-learning for partially observable MDPs. CoRR, abs/1507.06527, 2015
  2. Dietterich TG. 2000. Ensemble methods in machine learning. In Multiple Classifier Systems: First International Workshop, Cagliari, Italy, June 21–23, pp. 1–15. Berlin: Springer
  3. G. Shani, R. Brafman, and D. Heckerman. An MDP-based recommender system. In Proceedings of the Eigh- teenth conference on Uncertainty in artificial intelligence, pages 453–460. Morgan Kaufmann Publishers Inc., 2002
  4. Çetinkaya, A., Zhang, Y.Z., Hao, Y.M. and Ma, X.Y., MO Stock Price Prediction. AC Investment Research Journal, 101(3).
  5. A. Tamar and S. Mannor. Variance adjusted actor critic algorithms. arXiv preprint arXiv:1310.3697, 2013.
  6. L. Panait and S. Luke. Cooperative multi-agent learning: The state of the art. Autonomous Agents and Multi-Agent Systems, 11(3):387–434, 2005.
  7. Thomas P, Brunskill E. 2016. Data-efficient off-policy policy evaluation for reinforcement learning. In Pro- ceedings of the International Conference on Machine Learning, pp. 2139–48. La Jolla, CA: Int. Mach. Learn. Soc.
Frequently Asked QuestionsQ: What is the prediction methodology for GOOGL stock?
A: GOOGL stock prediction methodology: We evaluate the prediction models Reinforcement Machine Learning (ML) and Statistical Hypothesis Testing
Q: Is GOOGL stock a buy or sell?
A: The dominant strategy among neural network is to Sell GOOGL Stock.
Q: Is Alphabet Inc. Class A Common Stock stock a good investment?
A: The consensus rating for Alphabet Inc. Class A Common Stock is Sell and is assigned short-term Ba1 & long-term Ba1 estimated rating.
Q: What is the consensus rating of GOOGL stock?
A: The consensus rating for GOOGL is Sell.
Q: What is the prediction period for GOOGL stock?
A: The prediction period for GOOGL is (n+16 weeks)



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