Modelling A.I. in Economics

LON:SCT SOFTCAT PLC (Forecast)

Outlook: SOFTCAT PLC is assigned short-term Ba1 & long-term Ba1 estimated rating.
Dominant Strategy : Wait until speculative trend diminishes
Time series to forecast n: 16 Apr 2023 for (n+8 weeks)
Methodology : Modular Neural Network (News Feed Sentiment Analysis)

Abstract

SOFTCAT PLC prediction model is evaluated with Modular Neural Network (News Feed Sentiment Analysis) and Stepwise Regression1,2,3,4 and it is concluded that the LON:SCT stock is predictable in the short/long term. According to price forecasts for (n+8 weeks) period, the dominant strategy among neural network is: Wait until speculative trend diminishes

Key Points

  1. Nash Equilibria
  2. Is Target price a good indicator?
  3. What is the use of Markov decision process?

LON:SCT Target Price Prediction Modeling Methodology

We consider SOFTCAT PLC Decision Process with Modular Neural Network (News Feed Sentiment Analysis) where A is the set of discrete actions of LON:SCT 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(Stepwise Regression)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+8 weeks) R = r 1 r 2 r 3

n:Time series to forecast

p:Price signals of LON:SCT 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:SCT Stock Forecast (Buy or Sell) for (n+8 weeks)

Sample Set: Neural Network
Stock/Index: LON:SCT SOFTCAT PLC
Time series to forecast n: 16 Apr 2023 for (n+8 weeks)

According to price forecasts for (n+8 weeks) period, the dominant strategy among neural network is: Wait until speculative trend diminishes

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 SOFTCAT PLC

  1. An entity can also designate only changes in the cash flows or fair value of a hedged item above or below a specified price or other variable (a 'one-sided risk'). The intrinsic value of a purchased option hedging instrument (assuming that it has the same principal terms as the designated risk), but not its time value, reflects a one-sided risk in a hedged item. For example, an entity can designate the variability of future cash flow outcomes resulting from a price increase of a forecast commodity purchase. In such a situation, the entity designates only cash flow losses that result from an increase in the price above the specified level. The hedged risk does not include the time value of a purchased option, because the time value is not a component of the forecast transaction that affects profit or loss.
  2. In applying the effective interest method, an entity identifies fees that are an integral part of the effective interest rate of a financial instrument. The description of fees for financial services may not be indicative of the nature and substance of the services provided. Fees that are an integral part of the effective interest rate of a financial instrument are treated as an adjustment to the effective interest rate, unless the financial instrument is measured at fair value, with the change in fair value being recognised in profit or loss. In those cases, the fees are recognised as revenue or expense when the instrument is initially recognised.
  3. In cases such as those described in the preceding paragraph, to designate, at initial recognition, the financial assets and financial liabilities not otherwise so measured as at fair value through profit or loss may eliminate or significantly reduce the measurement or recognition inconsistency and produce more relevant information. For practical purposes, the entity need not enter into all of the assets and liabilities giving rise to the measurement or recognition inconsistency at exactly the same time. A reasonable delay is permitted provided that each transaction is designated as at fair value through profit or loss at its initial recognition and, at that time, any remaining transactions are expected to occur.
  4. When defining default for the purposes of determining the risk of a default occurring, an entity shall apply a default definition that is consistent with the definition used for internal credit risk management purposes for the relevant financial instrument and consider qualitative indicators (for example, financial covenants) when appropriate. However, there is a rebuttable presumption that default does not occur later than when a financial asset is 90 days past due unless an entity has reasonable and supportable information to demonstrate that a more lagging default criterion is more appropriate. The definition of default used for these purposes shall be applied consistently to all financial instruments unless information becomes available that demonstrates that another default definition is more appropriate for a particular financial instrument.

*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

SOFTCAT PLC is assigned short-term Ba1 & long-term Ba1 estimated rating. SOFTCAT PLC prediction model is evaluated with Modular Neural Network (News Feed Sentiment Analysis) and Stepwise Regression1,2,3,4 and it is concluded that the LON:SCT stock is predictable in the short/long term. According to price forecasts for (n+8 weeks) period, the dominant strategy among neural network is: Wait until speculative trend diminishes

LON:SCT SOFTCAT PLC Financial Analysis*

Rating Short-Term Long-Term Senior
Outlook*Ba1Ba1
Income StatementCBa3
Balance SheetCC
Leverage RatiosBaa2B3
Cash FlowCaa2B3
Rates of Return and ProfitabilityBaa2C

*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: 87 out of 100 with 857 signals.

References

  1. Alpaydin E. 2009. Introduction to Machine Learning. Cambridge, MA: MIT Press
  2. Banerjee, A., J. J. Dolado, J. W. Galbraith, D. F. Hendry (1993), Co-integration, Error-correction, and the Econometric Analysis of Non-stationary Data. Oxford: Oxford University Press.
  3. Breusch, T. S. A. R. Pagan (1979), "A simple test for heteroskedasticity and random coefficient variation," Econometrica, 47, 1287–1294.
  4. Imbens G, Wooldridge J. 2009. Recent developments in the econometrics of program evaluation. J. Econ. Lit. 47:5–86
  5. Bamler R, Mandt S. 2017. Dynamic word embeddings via skip-gram filtering. In Proceedings of the 34th Inter- national Conference on Machine Learning, pp. 380–89. La Jolla, CA: Int. Mach. Learn. Soc.
  6. Thompson WR. 1933. On the likelihood that one unknown probability exceeds another in view of the evidence of two samples. Biometrika 25:285–94
  7. Bottou L. 2012. Stochastic gradient descent tricks. In Neural Networks: Tricks of the Trade, ed. G Montavon, G Orr, K-R Müller, pp. 421–36. Berlin: Springer
Frequently Asked QuestionsQ: What is the prediction methodology for LON:SCT stock?
A: LON:SCT stock prediction methodology: We evaluate the prediction models Modular Neural Network (News Feed Sentiment Analysis) and Stepwise Regression
Q: Is LON:SCT stock a buy or sell?
A: The dominant strategy among neural network is to Wait until speculative trend diminishes LON:SCT Stock.
Q: Is SOFTCAT PLC stock a good investment?
A: The consensus rating for SOFTCAT PLC is Wait until speculative trend diminishes and is assigned short-term Ba1 & long-term Ba1 estimated rating.
Q: What is the consensus rating of LON:SCT stock?
A: The consensus rating for LON:SCT is Wait until speculative trend diminishes.
Q: What is the prediction period for LON:SCT stock?
A: The prediction period for LON:SCT is (n+8 weeks)

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