Modelling A.I. in Economics

CSWC Capital Southwest Corporation Common Stock (Forecast)

Outlook: Capital Southwest Corporation Common Stock is assigned short-term Ba1 & long-term Ba1 estimated rating.
Dominant Strategy : Hold
Time series to forecast n: 22 May 2023 for (n+3 month)
Methodology : Modular Neural Network (DNN Layer)

Abstract

Capital Southwest Corporation Common Stock prediction model is evaluated with Modular Neural Network (DNN Layer) and Ridge Regression1,2,3,4 and it is concluded that the CSWC stock is predictable in the short/long term. According to price forecasts for (n+3 month) period, the dominant strategy among neural network is: Hold

Key Points

  1. Can statistics predict the future?
  2. Operational Risk
  3. What are the most successful trading algorithms?

CSWC Target Price Prediction Modeling Methodology

We consider Capital Southwest Corporation Common Stock Decision Process with Modular Neural Network (DNN Layer) where A is the set of discrete actions of CSWC 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(Ridge 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 (DNN Layer)) X S(n):→ (n+3 month) i = 1 n s i

n:Time series to forecast

p:Price signals of CSWC 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?

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

Sample Set: Neural Network
Stock/Index: CSWC Capital Southwest Corporation Common Stock
Time series to forecast n: 22 May 2023 for (n+3 month)

According to price forecasts for (n+3 month) period, the dominant strategy among neural network is: Hold

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 Capital Southwest Corporation Common Stock

  1. Alternatively, the entity may base the assessment on both types of information, ie qualitative factors that are not captured through the internal ratings process and a specific internal rating category at the reporting date, taking into consideration the credit risk characteristics at initial recognition, if both types of information are relevant.
  2. Despite the requirement in paragraph 7.2.1, an entity that adopts the classification and measurement requirements of this Standard (which include the requirements related to amortised cost measurement for financial assets and impairment in Sections 5.4 and 5.5) shall provide the disclosures set out in paragraphs 42L–42O of IFRS 7 but need not restate prior periods. The entity may restate prior periods if, and only if, it is possible without the use of hindsight. If an entity does not restate prior periods, the entity shall recognise any difference between the previous carrying amount and the carrying amount at the beginning of the annual reporting period that includes the date of initial application in the opening retained earnings (or other component of equity, as appropriate) of the annual reporting period that includes the date of initial application. However, if an entity restates prior periods, the restated financial statements must reflect all of the requirements in this Standard. If an entity's chosen approach to applying IFRS 9 results in more than one date of initial application for different requirements, this paragraph applies at each date of initial application (see paragraph 7.2.2). This would be the case, for example, if an entity elects to early apply only the requirements for the presentation of gains and losses on financial liabilities designated as at fair value through profit or loss in accordance with paragraph 7.1.2 before applying the other requirements in this Standard.
  3. As noted in paragraph B4.3.1, when an entity becomes a party to a hybrid contract with a host that is not an asset within the scope of this Standard and with one or more embedded derivatives, paragraph 4.3.3 requires the entity to identify any such embedded derivative, assess whether it is required to be separated from the host contract and, for those that are required to be separated, measure the derivatives at fair value at initial recognition and subsequently. These requirements can be more complex, or result in less reliable measures, than measuring the entire instrument at fair value through profit or loss. For that reason this Standard permits the entire hybrid contract to be designated as at fair value through profit or loss.
  4. 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.

*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

Capital Southwest Corporation Common Stock is assigned short-term Ba1 & long-term Ba1 estimated rating. Capital Southwest Corporation Common Stock prediction model is evaluated with Modular Neural Network (DNN Layer) and Ridge Regression1,2,3,4 and it is concluded that the CSWC stock is predictable in the short/long term. According to price forecasts for (n+3 month) period, the dominant strategy among neural network is: Hold

CSWC Capital Southwest Corporation Common Stock Financial Analysis*

Rating Short-Term Long-Term Senior
Outlook*Ba1Ba1
Income StatementBa3Baa2
Balance SheetCBaa2
Leverage RatiosB1C
Cash FlowB2Baa2
Rates of Return and ProfitabilityBa1Baa2

*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: 77 out of 100 with 511 signals.

References

  1. Thompson WR. 1933. On the likelihood that one unknown probability exceeds another in view of the evidence of two samples. Biometrika 25:285–94
  2. Hastie T, Tibshirani R, Friedman J. 2009. The Elements of Statistical Learning. Berlin: Springer
  3. 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.
  4. Armstrong, J. S. M. C. Grohman (1972), "A comparative study of methods for long-range market forecasting," Management Science, 19, 211–221.
  5. Hoerl AE, Kennard RW. 1970. Ridge regression: biased estimation for nonorthogonal problems. Technometrics 12:55–67
  6. Athey S, Bayati M, Imbens G, Zhaonan Q. 2019. Ensemble methods for causal effects in panel data settings. NBER Work. Pap. 25675
  7. Bell RM, Koren Y. 2007. Lessons from the Netflix prize challenge. ACM SIGKDD Explor. Newsl. 9:75–79
Frequently Asked QuestionsQ: What is the prediction methodology for CSWC stock?
A: CSWC stock prediction methodology: We evaluate the prediction models Modular Neural Network (DNN Layer) and Ridge Regression
Q: Is CSWC stock a buy or sell?
A: The dominant strategy among neural network is to Hold CSWC Stock.
Q: Is Capital Southwest Corporation Common Stock stock a good investment?
A: The consensus rating for Capital Southwest Corporation Common Stock is Hold and is assigned short-term Ba1 & long-term Ba1 estimated rating.
Q: What is the consensus rating of CSWC stock?
A: The consensus rating for CSWC is Hold.
Q: What is the prediction period for CSWC stock?
A: The prediction period for CSWC is (n+3 month)

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