Modelling A.I. in Economics

LON:MPL MERCANTILE PORTS & LOGISTICS LIMITED (Forecast)

Outlook: MERCANTILE PORTS & LOGISTICS LIMITED is assigned short-term Ba1 & long-term Ba1 estimated rating.
Dominant Strategy : Hold
Time series to forecast n: 25 May 2023 for (n+8 weeks)
Methodology : Multi-Task Learning (ML)

Abstract

MERCANTILE PORTS & LOGISTICS LIMITED prediction model is evaluated with Multi-Task Learning (ML) and Spearman Correlation1,2,3,4 and it is concluded that the LON:MPL stock is predictable in the short/long term. According to price forecasts for (n+8 weeks) period, the dominant strategy among neural network is: Hold

Key Points

  1. Can machine learning predict?
  2. Why do we need predictive models?
  3. How can neural networks improve predictions?

LON:MPL Target Price Prediction Modeling Methodology

We consider MERCANTILE PORTS & LOGISTICS LIMITED Decision Process with Multi-Task Learning (ML) where A is the set of discrete actions of LON:MPL 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(Spearman 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-Task Learning (ML)) X S(n):→ (n+8 weeks) r s rs

n:Time series to forecast

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

Sample Set: Neural Network
Stock/Index: LON:MPL MERCANTILE PORTS & LOGISTICS LIMITED
Time series to forecast n: 25 May 2023 for (n+8 weeks)

According to price forecasts for (n+8 weeks) 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 MERCANTILE PORTS & LOGISTICS LIMITED

  1. 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.
  2. Paragraph 6.3.6 states that in consolidated financial statements the foreign currency risk of a highly probable forecast intragroup transaction may qualify as a hedged item in a cash flow hedge, provided that the transaction is denominated in a currency other than the functional currency of the entity entering into that transaction and that the foreign currency risk will affect consolidated profit or loss. For this purpose an entity can be a parent, subsidiary, associate, joint arrangement or branch. If the foreign currency risk of a forecast intragroup transaction does not affect consolidated profit or loss, the intragroup transaction cannot qualify as a hedged item. This is usually the case for royalty payments, interest payments or management charges between members of the same group, unless there is a related external transaction. However, when the foreign currency risk of a forecast intragroup transaction will affect consolidated profit or loss, the intragroup transaction can qualify as a hedged item. An example is forecast sales or purchases of inventories between members of the same group if there is an onward sale of the inventory to a party external to the group. Similarly, a forecast intragroup sale of plant and equipment from the group entity that manufactured it to a group entity that will use the plant and equipment in its operations may affect consolidated profit or loss. This could occur, for example, because the plant and equipment will be depreciated by the purchasing entity and the amount initially recognised for the plant and equipment may change if the forecast intragroup transaction is denominated in a currency other than the functional currency of the purchasing entity.
  3. Rebalancing refers to the adjustments made to the designated quantities of the hedged item or the hedging instrument of an already existing hedging relationship for the purpose of maintaining a hedge ratio that complies with the hedge effectiveness requirements. Changes to designated quantities of a hedged item or of a hedging instrument for a different purpose do not constitute rebalancing for the purpose of this Standard
  4. When assessing a modified time value of money element, an entity must consider factors that could affect future contractual cash flows. For example, if an entity is assessing a bond with a five-year term and the variable interest rate is reset every six months to a five-year rate, the entity cannot conclude that the contractual cash flows are solely payments of principal and interest on the principal amount outstanding simply because the interest rate curve at the time of the assessment is such that the difference between a five-year interest rate and a six-month interest rate is not significant. Instead, the entity must also consider whether the relationship between the five-year interest rate and the six-month interest rate could change over the life of the instrument such that the contractual (undiscounted) cash flows over the life of the instrument could be significantly different from the (undiscounted) benchmark cash flows. However, an entity must consider only reasonably possible scenarios instead of every possible scenario. If an entity concludes that the contractual (undiscounted) cash flows could be significantly different from the (undiscounted) benchmark cash flows, the financial asset does not meet the condition in paragraphs 4.1.2(b) and 4.1.2A(b) and therefore cannot be measured at amortised cost or fair value through other comprehensive income.

*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

MERCANTILE PORTS & LOGISTICS LIMITED is assigned short-term Ba1 & long-term Ba1 estimated rating. MERCANTILE PORTS & LOGISTICS LIMITED prediction model is evaluated with Multi-Task Learning (ML) and Spearman Correlation1,2,3,4 and it is concluded that the LON:MPL stock is predictable in the short/long term. According to price forecasts for (n+8 weeks) period, the dominant strategy among neural network is: Hold

LON:MPL MERCANTILE PORTS & LOGISTICS LIMITED Financial Analysis*

Rating Short-Term Long-Term Senior
Outlook*Ba1Ba1
Income StatementCB2
Balance SheetCaa2B3
Leverage RatiosCC
Cash FlowCaa2B3
Rates of Return and ProfitabilityB2B2

*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: 80 out of 100 with 815 signals.

References

  1. Mikolov T, Yih W, Zweig G. 2013c. Linguistic regularities in continuous space word representations. In Pro- ceedings of the 2013 Conference of the North American Chapter of the Association for Computational Linguistics: Human Language Technologies, pp. 746–51. New York: Assoc. Comput. Linguist.
  2. LeCun Y, Bengio Y, Hinton G. 2015. Deep learning. Nature 521:436–44
  3. Andrews, D. W. K. (1993), "Tests for parameter instability and structural change with unknown change point," Econometrica, 61, 821–856.
  4. G. J. Laurent, L. Matignon, and N. L. Fort-Piat. The world of independent learners is not Markovian. Int. J. Know.-Based Intell. Eng. Syst., 15(1):55–64, 2011
  5. Breiman L. 1996. Bagging predictors. Mach. Learn. 24:123–40
  6. Athey S, Imbens GW. 2017a. The econometrics of randomized experiments. In Handbook of Economic Field Experiments, Vol. 1, ed. E Duflo, A Banerjee, pp. 73–140. Amsterdam: Elsevier
  7. P. Milgrom and I. Segal. Envelope theorems for arbitrary choice sets. Econometrica, 70(2):583–601, 2002
Frequently Asked QuestionsQ: What is the prediction methodology for LON:MPL stock?
A: LON:MPL stock prediction methodology: We evaluate the prediction models Multi-Task Learning (ML) and Spearman Correlation
Q: Is LON:MPL stock a buy or sell?
A: The dominant strategy among neural network is to Hold LON:MPL Stock.
Q: Is MERCANTILE PORTS & LOGISTICS LIMITED stock a good investment?
A: The consensus rating for MERCANTILE PORTS & LOGISTICS LIMITED is Hold and is assigned short-term Ba1 & long-term Ba1 estimated rating.
Q: What is the consensus rating of LON:MPL stock?
A: The consensus rating for LON:MPL is Hold.
Q: What is the prediction period for LON:MPL stock?
A: The prediction period for LON:MPL is (n+8 weeks)

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