Modelling A.I. in Economics

BSAC Banco Santander - Chile ADS (Forecast)

Outlook: Banco Santander - Chile ADS is assigned short-term Ba1 & long-term Ba1 estimated rating.
Dominant Strategy : Wait until speculative trend diminishes
Time series to forecast n: 23 Mar 2023 for (n+3 month)
Methodology : Modular Neural Network (Social Media Sentiment Analysis)

Abstract

Banco Santander - Chile ADS prediction model is evaluated with Modular Neural Network (Social Media Sentiment Analysis) and Lasso Regression1,2,3,4 and it is concluded that the BSAC stock is predictable in the short/long term. According to price forecasts for (n+3 month) period, the dominant strategy among neural network is: Wait until speculative trend diminishes

Key Points

  1. What is the best way to predict stock prices?
  2. Understanding Buy, Sell, and Hold Ratings
  3. Is it better to buy and sell or hold?

BSAC Target Price Prediction Modeling Methodology

We consider Banco Santander - Chile ADS Decision Process with Modular Neural Network (Social Media Sentiment Analysis) where A is the set of discrete actions of BSAC 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(Lasso 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 (Social Media Sentiment Analysis)) X S(n):→ (n+3 month) i = 1 n s i

n:Time series to forecast

p:Price signals of BSAC 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?

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

Sample Set: Neural Network
Stock/Index: BSAC Banco Santander - Chile ADS
Time series to forecast n: 23 Mar 2023 for (n+3 month)

According to price forecasts for (n+3 month) period, the dominant strategy among neural network is: Wait until speculative trend diminishes

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 Banco Santander - Chile ADS

  1. Interest Rate Benchmark Reform, which amended IFRS 9, IAS 39 and IFRS 7, issued in September 2019, added Section 6.8 and amended paragraph 7.2.26. An entity shall apply these amendments for annual periods beginning on or after 1 January 2020. Earlier application is permitted. If an entity applies these amendments for an earlier period, it shall disclose that fact.
  2. Contractual cash flows that are solely payments of principal and interest on the principal amount outstanding are consistent with a basic lending arrangement. In a basic lending arrangement, consideration for the time value of money (see paragraphs B4.1.9A–B4.1.9E) and credit risk are typically the most significant elements of interest. However, in such an arrangement, interest can also include consideration for other basic lending risks (for example, liquidity risk) and costs (for example, administrative costs) associated with holding the financial asset for a particular period of time. In addition, interest can include a profit margin that is consistent with a basic lending arrangement. In extreme economic circumstances, interest can be negative if, for example, the holder of a financial asset either explicitly or implicitly pays for the deposit of its money for a particular period of time (and that fee exceeds the consideration that the holder receives for the time value of money, credit risk and other basic lending risks and costs).
  3. A net position is eligible for hedge accounting only if an entity hedges on a net basis for risk management purposes. Whether an entity hedges in this way is a matter of fact (not merely of assertion or documentation). Hence, an entity cannot apply hedge accounting on a net basis solely to achieve a particular accounting outcome if that would not reflect its risk management approach. Net position hedging must form part of an established risk management strategy. Normally this would be approved by key management personnel as defined in IAS 24.
  4. The assessment of whether an economic relationship exists includes an analysis of the possible behaviour of the hedging relationship during its term to ascertain whether it can be expected to meet the risk management objective. The mere existence of a statistical correlation between two variables does not, by itself, support a valid conclusion that an economic relationship exists.

*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

Banco Santander - Chile ADS is assigned short-term Ba1 & long-term Ba1 estimated rating. Banco Santander - Chile ADS prediction model is evaluated with Modular Neural Network (Social Media Sentiment Analysis) and Lasso Regression1,2,3,4 and it is concluded that the BSAC stock is predictable in the short/long term. According to price forecasts for (n+3 month) period, the dominant strategy among neural network is: Wait until speculative trend diminishes

BSAC Banco Santander - Chile ADS Financial Analysis*

Rating Short-Term Long-Term Senior
Outlook*Ba1Ba1
Income StatementBaa2C
Balance SheetBaa2Baa2
Leverage RatiosCBa3
Cash FlowB3B2
Rates of Return and ProfitabilityCC

*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: 87 out of 100 with 863 signals.

References

  1. Hirano K, Porter JR. 2009. Asymptotics for statistical treatment rules. Econometrica 77:1683–701
  2. Li L, Chu W, Langford J, Moon T, Wang X. 2012. An unbiased offline evaluation of contextual bandit algo- rithms with generalized linear models. In Proceedings of 4th ACM International Conference on Web Search and Data Mining, pp. 297–306. New York: ACM
  3. Efron B, Hastie T. 2016. Computer Age Statistical Inference, Vol. 5. Cambridge, UK: Cambridge Univ. Press
  4. Athey S, Wager S. 2017. Efficient policy learning. arXiv:1702.02896 [math.ST]
  5. G. J. Laurent, L. Matignon, and N. L. Fort-Piat. The world of independent learners is not Markovian. Int. J. Know.-Based Intell. Eng. Syst., 15(1):55–64, 2011
  6. S. Bhatnagar, H. Prasad, and L. Prashanth. Stochastic recursive algorithms for optimization, volume 434. Springer, 2013
  7. Ruiz FJ, Athey S, Blei DM. 2017. SHOPPER: a probabilistic model of consumer choice with substitutes and complements. arXiv:1711.03560 [stat.ML]
Frequently Asked QuestionsQ: What is the prediction methodology for BSAC stock?
A: BSAC stock prediction methodology: We evaluate the prediction models Modular Neural Network (Social Media Sentiment Analysis) and Lasso Regression
Q: Is BSAC stock a buy or sell?
A: The dominant strategy among neural network is to Wait until speculative trend diminishes BSAC Stock.
Q: Is Banco Santander - Chile ADS stock a good investment?
A: The consensus rating for Banco Santander - Chile ADS is Wait until speculative trend diminishes and is assigned short-term Ba1 & long-term Ba1 estimated rating.
Q: What is the consensus rating of BSAC stock?
A: The consensus rating for BSAC is Wait until speculative trend diminishes.
Q: What is the prediction period for BSAC stock?
A: The prediction period for BSAC is (n+3 month)

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