Modelling A.I. in Economics

MFA^C MFA Financial Inc. 6.50% Series C Fixed-to-Floating Rate Cumulative Redeemable Preferred Stock (Forecast)

Outlook: MFA Financial Inc. 6.50% Series C Fixed-to-Floating Rate Cumulative Redeemable Preferred Stock is assigned short-term Ba1 & long-term Ba1 estimated rating.
Dominant Strategy : Hold
Time series to forecast n: 22 May 2023 for (n+8 weeks)
Methodology : Supervised Machine Learning (ML)

Abstract

MFA Financial Inc. 6.50% Series C Fixed-to-Floating Rate Cumulative Redeemable Preferred Stock prediction model is evaluated with Supervised Machine Learning (ML) and Lasso Regression1,2,3,4 and it is concluded that the MFA^C 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. How can neural networks improve predictions?
  3. What is prediction model?

MFA^C Target Price Prediction Modeling Methodology

We consider MFA Financial Inc. 6.50% Series C Fixed-to-Floating Rate Cumulative Redeemable Preferred Stock Decision Process with Supervised Machine Learning (ML) where A is the set of discrete actions of MFA^C 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(Lasso 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(Supervised Machine Learning (ML)) X S(n):→ (n+8 weeks) S = s 1 s 2 s 3

n:Time series to forecast

p:Price signals of MFA^C 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?

MFA^C Stock Forecast (Buy or Sell) for (n+8 weeks)

Sample Set: Neural Network
Stock/Index: MFA^C MFA Financial Inc. 6.50% Series C Fixed-to-Floating Rate Cumulative Redeemable Preferred Stock
Time series to forecast n: 22 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 MFA Financial Inc. 6.50% Series C Fixed-to-Floating Rate Cumulative Redeemable Preferred Stock

  1. If the contractual cash flows on a financial asset have been renegotiated or otherwise modified, but the financial asset is not derecognised, that financial asset is not automatically considered to have lower credit risk. An entity shall assess whether there has been a significant increase in credit risk since initial recognition on the basis of all reasonable and supportable information that is available without undue cost or effort. This includes historical and forwardlooking information and an assessment of the credit risk over the expected life of the financial asset, which includes information about the circumstances that led to the modification. Evidence that the criteria for the recognition of lifetime expected credit losses are no longer met may include a history of up-to-date and timely payment performance against the modified contractual terms. Typically a customer would need to demonstrate consistently good payment behaviour over a period of time before the credit risk is considered to have decreased.
  2. 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.
  3. In some circumstances, the renegotiation or modification of the contractual cash flows of a financial asset can lead to the derecognition of the existing financial asset in accordance with this Standard. When the modification of a financial asset results in the derecognition of the existing financial asset and the subsequent recognition of the modified financial asset, the modified asset is considered a 'new' financial asset for the purposes of this Standard.
  4. An entity is not required to restate prior periods to reflect the application of these amendments. The entity may restate prior periods only if it is possible to do so without the use of hindsight. If an entity restates prior periods, the restated financial statements must reflect all the requirements in this Standard for the affected financial instruments. 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 of these amendments in the opening retained earnings (or other component of equity, as appropriate) of the annual reporting period that includes the date of initial application of these amendments.

*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

MFA Financial Inc. 6.50% Series C Fixed-to-Floating Rate Cumulative Redeemable Preferred Stock is assigned short-term Ba1 & long-term Ba1 estimated rating. MFA Financial Inc. 6.50% Series C Fixed-to-Floating Rate Cumulative Redeemable Preferred Stock prediction model is evaluated with Supervised Machine Learning (ML) and Lasso Regression1,2,3,4 and it is concluded that the MFA^C 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

MFA^C MFA Financial Inc. 6.50% Series C Fixed-to-Floating Rate Cumulative Redeemable Preferred Stock Financial Analysis*

Rating Short-Term Long-Term Senior
Outlook*Ba1Ba1
Income StatementCC
Balance SheetBaa2C
Leverage RatiosBaa2Baa2
Cash FlowBa1C
Rates of Return and ProfitabilityB2B3

*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 527 signals.

References

  1. Zou H, Hastie T. 2005. Regularization and variable selection via the elastic net. J. R. Stat. Soc. B 67:301–20
  2. Krizhevsky A, Sutskever I, Hinton GE. 2012. Imagenet classification with deep convolutional neural networks. In Advances in Neural Information Processing Systems, Vol. 25, ed. Z Ghahramani, M Welling, C Cortes, ND Lawrence, KQ Weinberger, pp. 1097–105. San Diego, CA: Neural Inf. Process. Syst. Found.
  3. Pennington J, Socher R, Manning CD. 2014. GloVe: global vectors for word representation. In Proceedings of the 2014 Conference on Empirical Methods on Natural Language Processing, pp. 1532–43. New York: Assoc. Comput. Linguist.
  4. Alpaydin E. 2009. Introduction to Machine Learning. Cambridge, MA: MIT Press
  5. Scholkopf B, Smola AJ. 2001. Learning with Kernels: Support Vector Machines, Regularization, Optimization, and Beyond. Cambridge, MA: MIT Press
  6. 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.
  7. E. Altman. Constrained Markov decision processes, volume 7. CRC Press, 1999
Frequently Asked QuestionsQ: What is the prediction methodology for MFA^C stock?
A: MFA^C stock prediction methodology: We evaluate the prediction models Supervised Machine Learning (ML) and Lasso Regression
Q: Is MFA^C stock a buy or sell?
A: The dominant strategy among neural network is to Hold MFA^C Stock.
Q: Is MFA Financial Inc. 6.50% Series C Fixed-to-Floating Rate Cumulative Redeemable Preferred Stock stock a good investment?
A: The consensus rating for MFA Financial Inc. 6.50% Series C Fixed-to-Floating Rate Cumulative Redeemable Preferred Stock is Hold and is assigned short-term Ba1 & long-term Ba1 estimated rating.
Q: What is the consensus rating of MFA^C stock?
A: The consensus rating for MFA^C is Hold.
Q: What is the prediction period for MFA^C stock?
A: The prediction period for MFA^C is (n+8 weeks)

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