Modelling A.I. in Economics

FBHS Fortune Brands Home & Security Inc. Common Stock (Forecast)

Outlook: Fortune Brands Home & Security Inc. Common Stock is assigned short-term Ba1 & long-term Ba1 estimated rating.
Dominant Strategy : Buy
Time series to forecast n: 19 Apr 2023 for (n+3 month)
Methodology : Modular Neural Network (News Feed Sentiment Analysis)

Abstract

Fortune Brands Home & Security Inc. Common Stock prediction model is evaluated with Modular Neural Network (News Feed Sentiment Analysis) and Chi-Square1,2,3,4 and it is concluded that the FBHS 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. Can statistics predict the future?
  2. Investment Risk
  3. What is neural prediction?

FBHS Target Price Prediction Modeling Methodology

We consider Fortune Brands Home & Security Inc. Common Stock Decision Process with Modular Neural Network (News Feed Sentiment Analysis) where A is the set of discrete actions of FBHS 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(Chi-Square)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 (News Feed Sentiment Analysis)) X S(n):→ (n+3 month) i = 1 n r i

n:Time series to forecast

p:Price signals of FBHS 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?

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

Sample Set: Neural Network
Stock/Index: FBHS Fortune Brands Home & Security Inc. Common Stock
Time series to forecast n: 19 Apr 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 Fortune Brands Home & Security Inc. Common Stock

  1. When using historical credit loss experience in estimating expected credit losses, it is important that information about historical credit loss rates is applied to groups that are defined in a manner that is consistent with the groups for which the historical credit loss rates were observed. Consequently, the method used shall enable each group of financial assets to be associated with information about past credit loss experience in groups of financial assets with similar risk characteristics and with relevant observable data that reflects current conditions.
  2. A hedge of a firm commitment (for example, a hedge of the change in fuel price relating to an unrecognised contractual commitment by an electric utility to purchase fuel at a fixed price) is a hedge of an exposure to a change in fair value. Accordingly, such a hedge is a fair value hedge. However, in accordance with paragraph 6.5.4, a hedge of the foreign currency risk of a firm commitment could alternatively be accounted for as a cash flow hedge.
  3. An entity's business model is determined at a level that reflects how groups of financial assets are managed together to achieve a particular business objective. The entity's business model does not depend on management's intentions for an individual instrument. Accordingly, this condition is not an instrument-by-instrument approach to classification and should be determined on a higher level of aggregation. However, a single entity may have more than one business model for managing its financial instruments. Consequently, classification need not be determined at the reporting entity level. For example, an entity may hold a portfolio of investments that it manages in order to collect contractual cash flows and another portfolio of investments that it manages in order to trade to realise fair value changes. Similarly, in some circumstances, it may be appropriate to separate a portfolio of financial assets into subportfolios in order to reflect the level at which an entity manages those financial assets. For example, that may be the case if an entity originates or purchases a portfolio of mortgage loans and manages some of the loans with an objective of collecting contractual cash flows and manages the other loans with an objective of selling them.
  4. The business model may be to hold assets to collect contractual cash flows even if the entity sells financial assets when there is an increase in the assets' credit risk. To determine whether there has been an increase in the assets' credit risk, the entity considers reasonable and supportable information, including forward looking information. Irrespective of their frequency and value, sales due to an increase in the assets' credit risk are not inconsistent with a business model whose objective is to hold financial assets to collect contractual cash flows because the credit quality of financial assets is relevant to the entity's ability to collect contractual cash flows. Credit risk management activities that are aimed at minimising potential credit losses due to credit deterioration are integral to such a business model. Selling a financial asset because it no longer meets the credit criteria specified in the entity's documented investment policy is an example of a sale that has occurred due to an increase in credit risk. However, in the absence of such a policy, the entity may demonstrate in other ways that the sale occurred due to an increase in credit risk.

*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

Fortune Brands Home & Security Inc. Common Stock is assigned short-term Ba1 & long-term Ba1 estimated rating. Fortune Brands Home & Security Inc. Common Stock prediction model is evaluated with Modular Neural Network (News Feed Sentiment Analysis) and Chi-Square1,2,3,4 and it is concluded that the FBHS 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

FBHS Fortune Brands Home & Security Inc. Common Stock Financial Analysis*

Rating Short-Term Long-Term Senior
Outlook*Ba1Ba1
Income StatementCaa2Baa2
Balance SheetB1Baa2
Leverage RatiosB3B3
Cash FlowB2B2
Rates of Return and ProfitabilityBa1B2

*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 691 signals.

References

  1. Chen, C. L. Liu (1993), "Joint estimation of model parameters and outlier effects in time series," Journal of the American Statistical Association, 88, 284–297.
  2. Bewley, R. M. Yang (1998), "On the size and power of system tests for cointegration," Review of Economics and Statistics, 80, 675–679.
  3. Chow, G. C. (1960), "Tests of equality between sets of coefficients in two linear regressions," Econometrica, 28, 591–605.
  4. Belloni A, Chernozhukov V, Hansen C. 2014. High-dimensional methods and inference on structural and treatment effects. J. Econ. Perspect. 28:29–50
  5. T. Shardlow and A. Stuart. A perturbation theory for ergodic Markov chains and application to numerical approximations. SIAM journal on numerical analysis, 37(4):1120–1137, 2000
  6. ZXhang, Y.X., Haxo, Y.M. and Mat, Y.X., 2023. Can Neural Networks Predict Stock Market? (No. Stock Analysis). AC Investment Research.
  7. K. Tuyls and G. Weiss. Multiagent learning: Basics, challenges, and prospects. AI Magazine, 33(3): 41–52, 2012
Frequently Asked QuestionsQ: What is the prediction methodology for FBHS stock?
A: FBHS stock prediction methodology: We evaluate the prediction models Modular Neural Network (News Feed Sentiment Analysis) and Chi-Square
Q: Is FBHS stock a buy or sell?
A: The dominant strategy among neural network is to Buy FBHS Stock.
Q: Is Fortune Brands Home & Security Inc. Common Stock stock a good investment?
A: The consensus rating for Fortune Brands Home & Security Inc. Common Stock is Buy and is assigned short-term Ba1 & long-term Ba1 estimated rating.
Q: What is the consensus rating of FBHS stock?
A: The consensus rating for FBHS is Buy.
Q: What is the prediction period for FBHS stock?
A: The prediction period for FBHS is (n+3 month)

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