Modelling A.I. in Economics

KMX CarMax Inc (Forecast)

Outlook: CarMax Inc is assigned short-term Ba1 & long-term Ba1 estimated rating.
Dominant Strategy : Buy
Time series to forecast n: 20 May 2023 for (n+1 year)
Methodology : Multi-Instance Learning (ML)

Abstract

CarMax Inc prediction model is evaluated with Multi-Instance Learning (ML) and Pearson Correlation1,2,3,4 and it is concluded that the KMX stock is predictable in the short/long term. According to price forecasts for (n+1 year) period, the dominant strategy among neural network is: Buy

Key Points

  1. Stock Rating
  2. Why do we need predictive models?
  3. How accurate is machine learning in stock market?

KMX Target Price Prediction Modeling Methodology

We consider CarMax Inc Decision Process with Multi-Instance Learning (ML) where A is the set of discrete actions of KMX 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(Pearson Correlation)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(Multi-Instance Learning (ML)) X S(n):→ (n+1 year) i = 1 n r i

n:Time series to forecast

p:Price signals of KMX 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?

KMX Stock Forecast (Buy or Sell) for (n+1 year)

Sample Set: Neural Network
Stock/Index: KMX CarMax Inc
Time series to forecast n: 20 May 2023 for (n+1 year)

According to price forecasts for (n+1 year) 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 CarMax Inc

  1. Expected credit losses reflect an entity's own expectations of credit losses. However, when considering all reasonable and supportable information that is available without undue cost or effort in estimating expected credit losses, an entity should also consider observable market information about the credit risk of the particular financial instrument or similar financial instruments.
  2. An entity that first applies these amendments at the same time it first applies this Standard shall apply paragraphs 7.2.1–7.2.28 instead of paragraphs 7.2.31–7.2.34.
  3. To be eligible for designation as a hedged item, a risk component must be a separately identifiable component of the financial or the non-financial item, and the changes in the cash flows or the fair value of the item attributable to changes in that risk component must be reliably measurable.
  4. For a financial guarantee contract, the entity is required to make payments only in the event of a default by the debtor in accordance with the terms of the instrument that is guaranteed. Accordingly, cash shortfalls are the expected payments to reimburse the holder for a credit loss that it incurs less any amounts that the entity expects to receive from the holder, the debtor or any other party. If the asset is fully guaranteed, the estimation of cash shortfalls for a financial guarantee contract would be consistent with the estimations of cash shortfalls for the asset subject to the guarantee

*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

CarMax Inc is assigned short-term Ba1 & long-term Ba1 estimated rating. CarMax Inc prediction model is evaluated with Multi-Instance Learning (ML) and Pearson Correlation1,2,3,4 and it is concluded that the KMX stock is predictable in the short/long term. According to price forecasts for (n+1 year) period, the dominant strategy among neural network is: Buy

KMX CarMax Inc Financial Analysis*

Rating Short-Term Long-Term Senior
Outlook*Ba1Ba1
Income StatementCaa2Caa2
Balance SheetB2C
Leverage RatiosB1Caa2
Cash FlowBaa2Caa2
Rates of Return and ProfitabilityBa3Baa2

*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: 74 out of 100 with 704 signals.

References

  1. Athey S, Imbens GW. 2017b. The state of applied econometrics: causality and policy evaluation. J. Econ. Perspect. 31:3–32
  2. O. Bardou, N. Frikha, and G. Pag`es. Computing VaR and CVaR using stochastic approximation and adaptive unconstrained importance sampling. Monte Carlo Methods and Applications, 15(3):173–210, 2009.
  3. Jacobs B, Donkers B, Fok D. 2014. Product Recommendations Based on Latent Purchase Motivations. Rotterdam, Neth.: ERIM
  4. S. Bhatnagar. An actor-critic algorithm with function approximation for discounted cost constrained Markov decision processes. Systems & Control Letters, 59(12):760–766, 2010
  5. G. Theocharous and A. Hallak. Lifetime value marketing using reinforcement learning. RLDM 2013, page 19, 2013
  6. Hastie T, Tibshirani R, Friedman J. 2009. The Elements of Statistical Learning. Berlin: Springer
  7. Chernozhukov V, Chetverikov D, Demirer M, Duflo E, Hansen C, et al. 2018a. Double/debiased machine learning for treatment and structural parameters. Econom. J. 21:C1–68
Frequently Asked QuestionsQ: What is the prediction methodology for KMX stock?
A: KMX stock prediction methodology: We evaluate the prediction models Multi-Instance Learning (ML) and Pearson Correlation
Q: Is KMX stock a buy or sell?
A: The dominant strategy among neural network is to Buy KMX Stock.
Q: Is CarMax Inc stock a good investment?
A: The consensus rating for CarMax Inc is Buy and is assigned short-term Ba1 & long-term Ba1 estimated rating.
Q: What is the consensus rating of KMX stock?
A: The consensus rating for KMX is Buy.
Q: What is the prediction period for KMX stock?
A: The prediction period for KMX is (n+1 year)

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