Modelling A.I. in Economics

LON:MRC MERCANTILE INVESTMENT TRUST (THE) PLC

Outlook: MERCANTILE INVESTMENT TRUST (THE) PLC is assigned short-term Ba1 & long-term Ba1 estimated rating.
Dominant Strategy : Sell
Time series to forecast n: 29 Mar 2023 for (n+4 weeks)
Methodology : Modular Neural Network (Financial Sentiment Analysis)

Abstract

MERCANTILE INVESTMENT TRUST (THE) PLC prediction model is evaluated with Modular Neural Network (Financial Sentiment Analysis) and Statistical Hypothesis Testing1,2,3,4 and it is concluded that the LON:MRC stock is predictable in the short/long term. According to price forecasts for (n+4 weeks) period, the dominant strategy among neural network is: Sell

Key Points

  1. Prediction Modeling
  2. Trading Interaction
  3. Investment Risk

LON:MRC Target Price Prediction Modeling Methodology

We consider MERCANTILE INVESTMENT TRUST (THE) PLC Decision Process with Modular Neural Network (Financial Sentiment Analysis) where A is the set of discrete actions of LON:MRC 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(Modular Neural Network (Financial Sentiment Analysis)) X S(n):→ (n+4 weeks) i = 1 n r i

n:Time series to forecast

p:Price signals of LON:MRC 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:MRC Stock Forecast (Buy or Sell) for (n+4 weeks)

Sample Set: Neural Network
Stock/Index: LON:MRC MERCANTILE INVESTMENT TRUST (THE) PLC
Time series to forecast n: 29 Mar 2023 for (n+4 weeks)

According to price forecasts for (n+4 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 MERCANTILE INVESTMENT TRUST (THE) PLC

  1. For example, an entity may use this condition to designate financial liabilities as at fair value through profit or loss if it meets the principle in paragraph 4.2.2(b) and the entity has financial assets and financial liabilities that share one or more risks and those risks are managed and evaluated on a fair value basis in accordance with a documented policy of asset and liability management. An example could be an entity that has issued 'structured products' containing multiple embedded derivatives and manages the resulting risks on a fair value basis using a mix of derivative and non-derivative financial instruments
  2. If an entity previously accounted at cost (in accordance with IAS 39), for an investment in an equity instrument that does not have a quoted price in an active market for an identical instrument (ie a Level 1 input) (or for a derivative asset that is linked to and must be settled by delivery of such an equity instrument) it shall measure that instrument at fair value at the date of initial application. Any difference between the previous carrying amount and the fair value shall be recognised in the opening retained earnings (or other component of equity, as appropriate) of the reporting period that includes the date of initial application.
  3. For example, Entity A, whose functional currency is its local currency, has a firm commitment to pay FC150,000 for advertising expenses in nine months' time and a firm commitment to sell finished goods for FC150,000 in 15 months' time. Entity A enters into a foreign currency derivative that settles in nine months' time under which it receives FC100 and pays CU70. Entity A has no other exposures to FC. Entity A does not manage foreign currency risk on a net basis. Hence, Entity A cannot apply hedge accounting for a hedging relationship between the foreign currency derivative and a net position of FC100 (consisting of FC150,000 of the firm purchase commitment—ie advertising services—and FC149,900 (of the FC150,000) of the firm sale commitment) for a nine-month period.
  4. Rebalancing does not apply if the risk management objective for a hedging relationship has changed. Instead, hedge accounting for that hedging relationship shall be discontinued (despite that an entity might designate a new hedging relationship that involves the hedging instrument or hedged item of the previous hedging relationship as described in paragraph B6.5.28).

*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

MERCANTILE INVESTMENT TRUST (THE) PLC is assigned short-term Ba1 & long-term Ba1 estimated rating. MERCANTILE INVESTMENT TRUST (THE) PLC prediction model is evaluated with Modular Neural Network (Financial Sentiment Analysis) and Statistical Hypothesis Testing1,2,3,4 and it is concluded that the LON:MRC stock is predictable in the short/long term. According to price forecasts for (n+4 weeks) period, the dominant strategy among neural network is: Sell

LON:MRC MERCANTILE INVESTMENT TRUST (THE) PLC Financial Analysis*

Rating Short-Term Long-Term Senior
Outlook*Ba1Ba1
Income StatementB1Baa2
Balance SheetCaa2B3
Leverage RatiosBaa2Baa2
Cash FlowBaa2Baa2
Rates of Return and ProfitabilityB2Baa2

*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: 81 out of 100 with 495 signals.

References

  1. Athey S. 2017. Beyond prediction: using big data for policy problems. Science 355:483–85
  2. Hastie T, Tibshirani R, Tibshirani RJ. 2017. Extended comparisons of best subset selection, forward stepwise selection, and the lasso. arXiv:1707.08692 [stat.ME]
  3. Bottou L. 1998. Online learning and stochastic approximations. In On-Line Learning in Neural Networks, ed. D Saad, pp. 9–42. New York: ACM
  4. G. Theocharous and A. Hallak. Lifetime value marketing using reinforcement learning. RLDM 2013, page 19, 2013
  5. Byron, R. P. O. Ashenfelter (1995), "Predicting the quality of an unborn grange," Economic Record, 71, 40–53.
  6. Angrist JD, Pischke JS. 2008. Mostly Harmless Econometrics: An Empiricist's Companion. Princeton, NJ: Princeton Univ. Press
  7. Athey S, Imbens G. 2016. Recursive partitioning for heterogeneous causal effects. PNAS 113:7353–60
Frequently Asked QuestionsQ: What is the prediction methodology for LON:MRC stock?
A: LON:MRC stock prediction methodology: We evaluate the prediction models Modular Neural Network (Financial Sentiment Analysis) and Statistical Hypothesis Testing
Q: Is LON:MRC stock a buy or sell?
A: The dominant strategy among neural network is to Sell LON:MRC Stock.
Q: Is MERCANTILE INVESTMENT TRUST (THE) PLC stock a good investment?
A: The consensus rating for MERCANTILE INVESTMENT TRUST (THE) PLC is Sell and is assigned short-term Ba1 & long-term Ba1 estimated rating.
Q: What is the consensus rating of LON:MRC stock?
A: The consensus rating for LON:MRC is Sell.
Q: What is the prediction period for LON:MRC stock?
A: The prediction period for LON:MRC is (n+4 weeks)

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