Modelling A.I. in Economics

BBVA Banco Bilbao Vizcaya Argentaria S.A. Common Stock

Outlook: Banco Bilbao Vizcaya Argentaria S.A. Common Stock is assigned short-term Ba1 & long-term Ba1 estimated rating.
Dominant Strategy : Sell
Time series to forecast n: 29 Apr 2023 for (n+6 month)
Methodology : Modular Neural Network (CNN Layer)

Abstract

Banco Bilbao Vizcaya Argentaria S.A. Common Stock prediction model is evaluated with Modular Neural Network (CNN Layer) and Independent T-Test1,2,3,4 and it is concluded that the BBVA stock is predictable in the short/long term. According to price forecasts for (n+6 month) period, the dominant strategy among neural network is: Sell

Key Points

  1. Decision Making
  2. How accurate is machine learning in stock market?
  3. Market Risk

BBVA Target Price Prediction Modeling Methodology

We consider Banco Bilbao Vizcaya Argentaria S.A. Common Stock Decision Process with Modular Neural Network (CNN Layer) where A is the set of discrete actions of BBVA 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(Independent T-Test)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+6 month) R = r 1 r 2 r 3

n:Time series to forecast

p:Price signals of BBVA 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?

BBVA Stock Forecast (Buy or Sell) for (n+6 month)

Sample Set: Neural Network
Stock/Index: BBVA Banco Bilbao Vizcaya Argentaria S.A. Common Stock
Time series to forecast n: 29 Apr 2023 for (n+6 month)

According to price forecasts for (n+6 month) 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 Banco Bilbao Vizcaya Argentaria S.A. Common Stock

  1. A contractually specified inflation risk component of the cash flows of a recognised inflation-linked bond (assuming that there is no requirement to account for an embedded derivative separately) is separately identifiable and reliably measurable, as long as other cash flows of the instrument are not affected by the inflation risk component.
  2. If a call option right retained by an entity prevents a transferred asset from being derecognised and the entity measures the transferred asset at fair value, the asset continues to be measured at its fair value. The associated liability is measured at (i) the option exercise price less the time value of the option if the option is in or at the money, or (ii) the fair value of the transferred asset less the time value of the option if the option is out of the money. The adjustment to the measurement of the associated liability ensures that the net carrying amount of the asset and the associated liability is the fair value of the call option right. For example, if the fair value of the underlying asset is CU80, the option exercise price is CU95 and the time value of the option is CU5, the carrying amount of the associated liability is CU75 (CU80 – CU5) and the carrying amount of the transferred asset is CU80 (ie its fair value)
  3. Historical information is an important anchor or base from which to measure expected credit losses. However, an entity shall adjust historical data, such as credit loss experience, on the basis of current observable data to reflect the effects of the current conditions and its forecasts of future conditions that did not affect the period on which the historical data is based, and to remove the effects of the conditions in the historical period that are not relevant to the future contractual cash flows. In some cases, the best reasonable and supportable information could be the unadjusted historical information, depending on the nature of the historical information and when it was calculated, compared to circumstances at the reporting date and the characteristics of the financial instrument being considered. Estimates of changes in expected credit losses should reflect, and be directionally consistent with, changes in related observable data from period to period
  4. If a put option obligation written by an entity or call option right held by an entity prevents a transferred asset from being derecognised and the entity measures the transferred asset at amortised cost, the associated liability is measured at its cost (ie the consideration received) adjusted for the amortisation of any difference between that cost and the gross carrying amount of the transferred asset at the expiration date of the option. For example, assume that the gross carrying amount of the asset on the date of the transfer is CU98 and that the consideration received is CU95. The gross carrying amount of the asset on the option exercise date will be CU100. The initial carrying amount of the associated liability is CU95 and the difference between CU95 and CU100 is recognised in profit or loss using the effective interest method. If the option is exercised, any difference between the carrying amount of the associated liability and the exercise price is recognised in profit or loss.

*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 Bilbao Vizcaya Argentaria S.A. Common Stock is assigned short-term Ba1 & long-term Ba1 estimated rating. Banco Bilbao Vizcaya Argentaria S.A. Common Stock prediction model is evaluated with Modular Neural Network (CNN Layer) and Independent T-Test1,2,3,4 and it is concluded that the BBVA stock is predictable in the short/long term. According to price forecasts for (n+6 month) period, the dominant strategy among neural network is: Sell

BBVA Banco Bilbao Vizcaya Argentaria S.A. Common Stock Financial Analysis*

Rating Short-Term Long-Term Senior
Outlook*Ba1Ba1
Income StatementB2Caa2
Balance SheetB2Ba3
Leverage RatiosCaa2Baa2
Cash FlowCaa2Ba3
Rates of Return and ProfitabilityBaa2Baa2

*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: 76 out of 100 with 846 signals.

References

  1. Athey S, Mobius MM, Pál J. 2017c. The impact of aggregators on internet news consumption. Unpublished manuscript, Grad. School Bus., Stanford Univ., Stanford, CA
  2. Cortes C, Vapnik V. 1995. Support-vector networks. Mach. Learn. 20:273–97
  3. Bessler, D. A. T. Covey (1991), "Cointegration: Some results on U.S. cattle prices," Journal of Futures Markets, 11, 461–474.
  4. Akgiray, V. (1989), "Conditional heteroscedasticity in time series of stock returns: Evidence and forecasts," Journal of Business, 62, 55–80.
  5. M. Colby, T. Duchow-Pressley, J. J. Chung, and K. Tumer. Local approximation of difference evaluation functions. In Proceedings of the Fifteenth International Joint Conference on Autonomous Agents and Multiagent Systems, Singapore, May 2016
  6. Harris ZS. 1954. Distributional structure. Word 10:146–62
  7. Imbens G, Wooldridge J. 2009. Recent developments in the econometrics of program evaluation. J. Econ. Lit. 47:5–86
Frequently Asked QuestionsQ: What is the prediction methodology for BBVA stock?
A: BBVA stock prediction methodology: We evaluate the prediction models Modular Neural Network (CNN Layer) and Independent T-Test
Q: Is BBVA stock a buy or sell?
A: The dominant strategy among neural network is to Sell BBVA Stock.
Q: Is Banco Bilbao Vizcaya Argentaria S.A. Common Stock stock a good investment?
A: The consensus rating for Banco Bilbao Vizcaya Argentaria S.A. Common Stock is Sell and is assigned short-term Ba1 & long-term Ba1 estimated rating.
Q: What is the consensus rating of BBVA stock?
A: The consensus rating for BBVA is Sell.
Q: What is the prediction period for BBVA stock?
A: The prediction period for BBVA is (n+6 month)



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