Modelling A.I. in Economics

LON:SOU SOUND ENERGY PLC (Forecast)

Outlook: SOUND ENERGY PLC is assigned short-term Ba1 & long-term Ba1 estimated rating.
Dominant Strategy : Buy
Time series to forecast n: 19 May 2023 for (n+16 weeks)
Methodology : Modular Neural Network (Speculative Sentiment Analysis)

Abstract

SOUND ENERGY PLC prediction model is evaluated with Modular Neural Network (Speculative Sentiment Analysis) and Pearson Correlation1,2,3,4 and it is concluded that the LON:SOU stock is predictable in the short/long term. According to price forecasts for (n+16 weeks) period, the dominant strategy among neural network is: Buy

Key Points

  1. Probability Distribution
  2. Stock Rating
  3. What is neural prediction?

LON:SOU Target Price Prediction Modeling Methodology

We consider SOUND ENERGY PLC Decision Process with Modular Neural Network (Speculative Sentiment Analysis) where A is the set of discrete actions of LON:SOU 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(Modular Neural Network (Speculative Sentiment Analysis)) X S(n):→ (n+16 weeks) e x rx

n:Time series to forecast

p:Price signals of LON:SOU 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:SOU Stock Forecast (Buy or Sell) for (n+16 weeks)

Sample Set: Neural Network
Stock/Index: LON:SOU SOUND ENERGY PLC
Time series to forecast n: 19 May 2023 for (n+16 weeks)

According to price forecasts for (n+16 weeks) 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 SOUND ENERGY PLC

  1. For the purposes of applying the requirement in paragraph 5.7.7(a), credit risk is different from asset-specific performance risk. Asset-specific performance risk is not related to the risk that an entity will fail to discharge a particular obligation but instead it is related to the risk that a single asset or a group of assets will perform poorly (or not at all).
  2. Accordingly the date of the modification shall be treated as the date of initial recognition of that financial asset when applying the impairment requirements to the modified financial asset. This typically means measuring the loss allowance at an amount equal to 12-month expected credit losses until the requirements for the recognition of lifetime expected credit losses in paragraph 5.5.3 are met. However, in some unusual circumstances following a modification that results in derecognition of the original financial asset, there may be evidence that the modified financial asset is credit-impaired at initial recognition, and thus, the financial asset should be recognised as an originated credit-impaired financial asset. This might occur, for example, in a situation in which there was a substantial modification of a distressed asset that resulted in the derecognition of the original financial asset. In such a case, it may be possible for the modification to result in a new financial asset which is credit-impaired at initial recognition.
  3. The methods used to determine whether credit risk has increased significantly on a financial instrument since initial recognition should consider the characteristics of the financial instrument (or group of financial instruments) and the default patterns in the past for comparable financial instruments. Despite the requirement in paragraph 5.5.9, for financial instruments for which default patterns are not concentrated at a specific point during the expected life of the financial instrument, changes in the risk of a default occurring over the next 12 months may be a reasonable approximation of the changes in the lifetime risk of a default occurring. In such cases, an entity may use changes in the risk of a default occurring over the next 12 months to determine whether credit risk has increased significantly since initial recognition, unless circumstances indicate that a lifetime assessment is necessary
  4. When using historical credit loss experience in estimating expected credit losses, it is important that information about historical credit loss rates is applied to groups that are defined in a manner that is consistent with the groups for which the historical credit loss rates were observed. Consequently, the method used shall enable each group of financial assets to be associated with information about past credit loss experience in groups of financial assets with similar risk characteristics and with relevant observable data that reflects current conditions.

*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

SOUND ENERGY PLC is assigned short-term Ba1 & long-term Ba1 estimated rating. SOUND ENERGY PLC prediction model is evaluated with Modular Neural Network (Speculative Sentiment Analysis) and Pearson Correlation1,2,3,4 and it is concluded that the LON:SOU stock is predictable in the short/long term. According to price forecasts for (n+16 weeks) period, the dominant strategy among neural network is: Buy

LON:SOU SOUND ENERGY PLC Financial Analysis*

Rating Short-Term Long-Term Senior
Outlook*Ba1Ba1
Income StatementBaa2Baa2
Balance SheetBa1Baa2
Leverage RatiosBa3Baa2
Cash FlowB1B1
Rates of Return and ProfitabilityB2Baa2

*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: 72 out of 100 with 598 signals.

References

  1. Athey S, Bayati M, Imbens G, Zhaonan Q. 2019. Ensemble methods for causal effects in panel data settings. NBER Work. Pap. 25675
  2. Hoerl AE, Kennard RW. 1970. Ridge regression: biased estimation for nonorthogonal problems. Technometrics 12:55–67
  3. S. Bhatnagar. An actor-critic algorithm with function approximation for discounted cost constrained Markov decision processes. Systems & Control Letters, 59(12):760–766, 2010
  4. Imbens G, Wooldridge J. 2009. Recent developments in the econometrics of program evaluation. J. Econ. Lit. 47:5–86
  5. Chamberlain G. 2000. Econometrics and decision theory. J. Econom. 95:255–83
  6. Scholkopf B, Smola AJ. 2001. Learning with Kernels: Support Vector Machines, Regularization, Optimization, and Beyond. Cambridge, MA: MIT Press
  7. V. Mnih, K. Kavukcuoglu, D. Silver, A. Rusu, J. Veness, M. Bellemare, A. Graves, M. Riedmiller, A. Fidjeland, G. Ostrovski, S. Petersen, C. Beattie, A. Sadik, I. Antonoglou, H. King, D. Kumaran, D. Wierstra, S. Legg, and D. Hassabis. Human-level control through deep reinforcement learning. Nature, 518(7540):529–533, 02 2015.
Frequently Asked QuestionsQ: What is the prediction methodology for LON:SOU stock?
A: LON:SOU stock prediction methodology: We evaluate the prediction models Modular Neural Network (Speculative Sentiment Analysis) and Pearson Correlation
Q: Is LON:SOU stock a buy or sell?
A: The dominant strategy among neural network is to Buy LON:SOU Stock.
Q: Is SOUND ENERGY PLC stock a good investment?
A: The consensus rating for SOUND ENERGY PLC is Buy and is assigned short-term Ba1 & long-term Ba1 estimated rating.
Q: What is the consensus rating of LON:SOU stock?
A: The consensus rating for LON:SOU is Buy.
Q: What is the prediction period for LON:SOU stock?
A: The prediction period for LON:SOU is (n+16 weeks)

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