Modelling A.I. in Economics

VBNK:TSX VersaBank (Forecast)

Outlook: VersaBank is assigned short-term Ba1 & long-term Ba1 estimated rating.
Dominant Strategy : Buy
Time series to forecast n: 21 Mar 2023 for (n+3 month)
Methodology : Transfer Learning (ML)

Abstract

VersaBank prediction model is evaluated with Transfer Learning (ML) and Statistical Hypothesis Testing1,2,3,4 and it is concluded that the VBNK:TSX 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. Fundemental Analysis with Algorithmic Trading
  2. What are main components of Markov decision process?
  3. Market Signals

VBNK:TSX Target Price Prediction Modeling Methodology

We consider VersaBank Decision Process with Transfer Learning (ML) where A is the set of discrete actions of VBNK: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(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(Transfer Learning (ML)) X S(n):→ (n+3 month) e x rx

n:Time series to forecast

p:Price signals of VBNK: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?

VBNK:TSX Stock Forecast (Buy or Sell) for (n+3 month)

Sample Set: Neural Network
Stock/Index: VBNK:TSX VersaBank
Time series to forecast n: 21 Mar 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 VersaBank

  1. If a financial instrument is designated in accordance with paragraph 6.7.1 as measured at fair value through profit or loss after its initial recognition, or was previously not recognised, the difference at the time of designation between the carrying amount, if any, and the fair value shall immediately be recognised in profit or loss. For financial assets measured at fair value through other comprehensive income in accordance with paragraph 4.1.2A, the cumulative gain or loss previously recognised in other comprehensive income shall immediately be reclassified from equity to profit or loss as a reclassification adjustment.
  2. Paragraphs 6.9.7–6.9.13 provide exceptions to the requirements specified in those paragraphs only. An entity shall apply all other hedge accounting requirements in this Standard, including the qualifying criteria in paragraph 6.4.1, to hedging relationships that were directly affected by interest rate benchmark reform.
  3. It would not be acceptable to designate only some of the financial assets and financial liabilities giving rise to the inconsistency as at fair value through profit or loss if to do so would not eliminate or significantly reduce the inconsistency and would therefore not result in more relevant information. However, it would be acceptable to designate only some of a number of similar financial assets or similar financial liabilities if doing so achieves a significant reduction (and possibly a greater reduction than other allowable designations) in the inconsistency. For example, assume an entity has a number of similar financial liabilities that sum to CU100 and a number of similar financial assets that sum to CU50 but are measured on a different basis. The entity may significantly reduce the measurement inconsistency by designating at initial recognition all of the assets but only some of the liabilities (for example, individual liabilities with a combined total of CU45) as at fair value through profit or loss. However, because designation as at fair value through profit or loss can be applied only to the whole of a financial instrument, the entity in this example must designate one or more liabilities in their entirety. It could not designate either a component of a liability (eg changes in value attributable to only one risk, such as changes in a benchmark interest rate) or a proportion (ie percentage) of a liability.
  4. For the purpose of applying paragraphs B4.1.11(b) and B4.1.12(b), irrespective of the event or circumstance that causes the early termination of the contract, a party may pay or receive reasonable compensation for that early termination. For example, a party may pay or receive reasonable compensation when it chooses to terminate the contract early (or otherwise causes the early termination to occur).

*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

VersaBank is assigned short-term Ba1 & long-term Ba1 estimated rating. VersaBank prediction model is evaluated with Transfer Learning (ML) and Statistical Hypothesis Testing1,2,3,4 and it is concluded that the VBNK:TSX 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

VBNK:TSX VersaBank Financial Analysis*

Rating Short-Term Long-Term Senior
Outlook*Ba1Ba1
Income StatementBa2Caa2
Balance SheetBa2C
Leverage RatiosB3C
Cash FlowB1Baa2
Rates of Return and ProfitabilityCBaa2

*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: 93 out of 100 with 872 signals.

References

  1. Matzkin RL. 2007. Nonparametric identification. In Handbook of Econometrics, Vol. 6B, ed. J Heckman, E Learner, pp. 5307–68. Amsterdam: Elsevier
  2. Jacobs B, Donkers B, Fok D. 2014. Product Recommendations Based on Latent Purchase Motivations. Rotterdam, Neth.: ERIM
  3. Thompson WR. 1933. On the likelihood that one unknown probability exceeds another in view of the evidence of two samples. Biometrika 25:285–94
  4. D. White. Mean, variance, and probabilistic criteria in finite Markov decision processes: A review. Journal of Optimization Theory and Applications, 56(1):1–29, 1988.
  5. Li L, Chen S, Kleban J, Gupta A. 2014. Counterfactual estimation and optimization of click metrics for search engines: a case study. In Proceedings of the 24th International Conference on the World Wide Web, pp. 929–34. New York: ACM
  6. Belsley, D. A. (1988), "Modelling and forecast reliability," International Journal of Forecasting, 4, 427–447.
  7. Ashley, R. (1988), "On the relative worth of recent macroeconomic forecasts," International Journal of Forecasting, 4, 363–376.
Frequently Asked QuestionsQ: What is the prediction methodology for VBNK:TSX stock?
A: VBNK:TSX stock prediction methodology: We evaluate the prediction models Transfer Learning (ML) and Statistical Hypothesis Testing
Q: Is VBNK:TSX stock a buy or sell?
A: The dominant strategy among neural network is to Buy VBNK:TSX Stock.
Q: Is VersaBank stock a good investment?
A: The consensus rating for VersaBank is Buy and is assigned short-term Ba1 & long-term Ba1 estimated rating.
Q: What is the consensus rating of VBNK:TSX stock?
A: The consensus rating for VBNK:TSX is Buy.
Q: What is the prediction period for VBNK:TSX stock?
A: The prediction period for VBNK:TSX is (n+3 month)

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