Modelling A.I. in Economics

LON:ACPE ACP ENERGY PLC (Forecast)

Outlook: ACP ENERGY PLC is assigned short-term Ba1 & long-term Ba1 estimated rating.
Dominant Strategy : Buy
Time series to forecast n: 30 Apr 2023 for (n+6 month)
Methodology : Deductive Inference (ML)

Abstract

ACP ENERGY PLC prediction model is evaluated with Deductive Inference (ML) and Statistical Hypothesis Testing1,2,3,4 and it is concluded that the LON:ACPE stock is predictable in the short/long term. According to price forecasts for (n+6 month) period, the dominant strategy among neural network is: Buy

Key Points

  1. Probability Distribution
  2. What is neural prediction?
  3. What are main components of Markov decision process?

LON:ACPE Target Price Prediction Modeling Methodology

We consider ACP ENERGY PLC Decision Process with Deductive Inference (ML) where A is the set of discrete actions of LON:ACPE 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(Deductive Inference (ML)) X S(n):→ (n+6 month) e x rx

n:Time series to forecast

p:Price signals of LON:ACPE 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:ACPE Stock Forecast (Buy or Sell) for (n+6 month)

Sample Set: Neural Network
Stock/Index: LON:ACPE ACP ENERGY PLC
Time series to forecast n: 30 Apr 2023 for (n+6 month)

According to price forecasts for (n+6 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 ACP ENERGY PLC

  1. If an entity originates a loan that bears an off-market interest rate (eg 5 per cent when the market rate for similar loans is 8 per cent), and receives an upfront fee as compensation, the entity recognises the loan at its fair value, ie net of the fee it receives.
  2. An entity's business model refers to how an entity manages its financial assets in order to generate cash flows. That is, the entity's business model determines whether cash flows will result from collecting contractual cash flows, selling financial assets or both. Consequently, this assessment is not performed on the basis of scenarios that the entity does not reasonably expect to occur, such as so-called 'worst case' or 'stress case' scenarios. For example, if an entity expects that it will sell a particular portfolio of financial assets only in a stress case scenario, that scenario would not affect the entity's assessment of the business model for those assets if the entity reasonably expects that such a scenario will not occur. If cash flows are realised in a way that is different from the entity's expectations at the date that the entity assessed the business model (for example, if the entity sells more or fewer financial assets than it expected when it classified the assets), that does not give rise to a prior period error in the entity's financial statements (see IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors) nor does it change the classification of the remaining financial assets held in that business model (ie those assets that the entity recognised in prior periods and still holds) as long as the entity considered all relevant information that was available at the time that it made the business model assessment.
  3. If the group of items does have offsetting risk positions (for example, a group of sales and expenses denominated in a foreign currency hedged together for foreign currency risk) then an entity shall present the hedging gains or losses in a separate line item in the statement of profit or loss and other comprehensive income. Consider, for example, a hedge of the foreign currency risk of a net position of foreign currency sales of FC100 and foreign currency expenses of FC80 using a forward exchange contract for FC20. The gain or loss on the forward exchange contract that is reclassified from the cash flow hedge reserve to profit or loss (when the net position affects profit or loss) shall be presented in a separate line item from the hedged sales and expenses. Moreover, if the sales occur in an earlier period than the expenses, the sales revenue is still measured at the spot exchange rate in accordance with IAS 21. The related hedging gain or loss is presented in a separate line item, so that profit or loss reflects the effect of hedging the net position, with a corresponding adjustment to the cash flow hedge reserve. When the hedged expenses affect profit or loss in a later period, the hedging gain or loss previously recognised in the cash flow hedge reserve on the sales is reclassified to profit or loss and presented as a separate line item from those that include the hedged expenses, which are measured at the spot exchange rate in accordance with IAS 21.
  4. 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.

*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

ACP ENERGY PLC is assigned short-term Ba1 & long-term Ba1 estimated rating. ACP ENERGY PLC prediction model is evaluated with Deductive Inference (ML) and Statistical Hypothesis Testing1,2,3,4 and it is concluded that the LON:ACPE stock is predictable in the short/long term. According to price forecasts for (n+6 month) period, the dominant strategy among neural network is: Buy

LON:ACPE ACP ENERGY PLC Financial Analysis*

Rating Short-Term Long-Term Senior
Outlook*Ba1Ba1
Income StatementBaa2Caa2
Balance SheetCBaa2
Leverage RatiosBa3Baa2
Cash FlowBaa2C
Rates of Return and ProfitabilityB1Caa2

*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: 83 out of 100 with 478 signals.

References

  1. Andrews, D. W. K. W. Ploberger (1994), "Optimal tests when a nuisance parameter is present only under the alternative," Econometrica, 62, 1383–1414.
  2. M. Sobel. The variance of discounted Markov decision processes. Applied Probability, pages 794–802, 1982
  3. 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
  4. P. Milgrom and I. Segal. Envelope theorems for arbitrary choice sets. Econometrica, 70(2):583–601, 2002
  5. R. Howard and J. Matheson. Risk sensitive Markov decision processes. Management Science, 18(7):356– 369, 1972
  6. 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.
  7. ZXhang, Y.X., Haxo, Y.M. and Mat, Y.X., 2023. Can Neural Networks Predict Stock Market? (No. Stock Analysis). AC Investment Research.
Frequently Asked QuestionsQ: What is the prediction methodology for LON:ACPE stock?
A: LON:ACPE stock prediction methodology: We evaluate the prediction models Deductive Inference (ML) and Statistical Hypothesis Testing
Q: Is LON:ACPE stock a buy or sell?
A: The dominant strategy among neural network is to Buy LON:ACPE Stock.
Q: Is ACP ENERGY PLC stock a good investment?
A: The consensus rating for ACP ENERGY PLC is Buy and is assigned short-term Ba1 & long-term Ba1 estimated rating.
Q: What is the consensus rating of LON:ACPE stock?
A: The consensus rating for LON:ACPE is Buy.
Q: What is the prediction period for LON:ACPE stock?
A: The prediction period for LON:ACPE is (n+6 month)

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