Modelling A.I. in Economics

RY:TSX Royal Bank of Canada (Forecast)

Outlook: Royal Bank of Canada is assigned short-term Ba1 & long-term Ba1 estimated rating.
Dominant Strategy : Buy
Time series to forecast n: 08 May 2023 for (n+8 weeks)
Methodology : Modular Neural Network (CNN Layer)

Abstract

Royal Bank of Canada prediction model is evaluated with Modular Neural Network (CNN Layer) and Statistical Hypothesis Testing1,2,3,4 and it is concluded that the RY:TSX stock is predictable in the short/long term. According to price forecasts for (n+8 weeks) period, the dominant strategy among neural network is: Buy

Key Points

  1. What are buy sell or hold recommendations?
  2. Which neural network is best for prediction?
  3. What is prediction model?

RY:TSX Target Price Prediction Modeling Methodology

We consider Royal Bank of Canada Decision Process with Modular Neural Network (CNN Layer) where A is the set of discrete actions of RY:TSX 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(Statistical Hypothesis Testing)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 (CNN Layer)) X S(n):→ (n+8 weeks) i = 1 n a i

n:Time series to forecast

p:Price signals of RY:TSX 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?

RY:TSX Stock Forecast (Buy or Sell) for (n+8 weeks)

Sample Set: Neural Network
Stock/Index: RY:TSX Royal Bank of Canada
Time series to forecast n: 08 May 2023 for (n+8 weeks)

According to price forecasts for (n+8 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 Royal Bank of Canada

  1. For the purpose of applying paragraphs B4.1.11(b) and B4.1.12(b), irrespective of the event or circumstance that causes the early termination of the contract, a party may pay or receive reasonable compensation for that early termination. For example, a party may pay or receive reasonable compensation when it chooses to terminate the contract early (or otherwise causes the early termination to occur).
  2. An entity shall assess whether contractual cash flows are solely payments of principal and interest on the principal amount outstanding for the currency in which the financial asset is denominated.
  3. If such a mismatch would be created or enlarged, the entity is required to present all changes in fair value (including the effects of changes in the credit risk of the liability) in profit or loss. If such a mismatch would not be created or enlarged, the entity is required to present the effects of changes in the liability's credit risk in other comprehensive income.
  4. If, at the date of initial application, determining whether there has been a significant increase in credit risk since initial recognition would require undue cost or effort, an entity shall recognise a loss allowance at an amount equal to lifetime expected credit losses at each reporting date until that financial instrument is derecognised (unless that financial instrument is low credit risk at a reporting date, in which case paragraph 7.2.19(a) applies).

*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

Royal Bank of Canada is assigned short-term Ba1 & long-term Ba1 estimated rating. Royal Bank of Canada prediction model is evaluated with Modular Neural Network (CNN Layer) and Statistical Hypothesis Testing1,2,3,4 and it is concluded that the RY:TSX stock is predictable in the short/long term. According to price forecasts for (n+8 weeks) period, the dominant strategy among neural network is: Buy

RY:TSX Royal Bank of Canada Financial Analysis*

Rating Short-Term Long-Term Senior
Outlook*Ba1Ba1
Income StatementCaa2Baa2
Balance SheetCC
Leverage RatiosBaa2Baa2
Cash FlowCaa2B3
Rates of Return and ProfitabilityBaa2Baa2

*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: 73 out of 100 with 787 signals.

References

  1. Semenova V, Goldman M, Chernozhukov V, Taddy M. 2018. Orthogonal ML for demand estimation: high dimensional causal inference in dynamic panels. arXiv:1712.09988 [stat.ML]
  2. J. Z. Leibo, V. Zambaldi, M. Lanctot, J. Marecki, and T. Graepel. Multi-agent Reinforcement Learning in Sequential Social Dilemmas. In Proceedings of the 16th International Conference on Autonomous Agents and Multiagent Systems (AAMAS 2017), Sao Paulo, Brazil, 2017
  3. Allen, P. G. (1994), "Economic forecasting in agriculture," International Journal of Forecasting, 10, 81–135.
  4. 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.
  5. Mnih A, Hinton GE. 2007. Three new graphical models for statistical language modelling. In International Conference on Machine Learning, pp. 641–48. La Jolla, CA: Int. Mach. Learn. Soc.
  6. Tibshirani R, Hastie T. 1987. Local likelihood estimation. J. Am. Stat. Assoc. 82:559–67
  7. Breiman L, Friedman J, Stone CJ, Olshen RA. 1984. Classification and Regression Trees. Boca Raton, FL: CRC Press
Frequently Asked QuestionsQ: What is the prediction methodology for RY:TSX stock?
A: RY:TSX stock prediction methodology: We evaluate the prediction models Modular Neural Network (CNN Layer) and Statistical Hypothesis Testing
Q: Is RY:TSX stock a buy or sell?
A: The dominant strategy among neural network is to Buy RY:TSX Stock.
Q: Is Royal Bank of Canada stock a good investment?
A: The consensus rating for Royal Bank of Canada is Buy and is assigned short-term Ba1 & long-term Ba1 estimated rating.
Q: What is the consensus rating of RY:TSX stock?
A: The consensus rating for RY:TSX is Buy.
Q: What is the prediction period for RY:TSX stock?
A: The prediction period for RY:TSX is (n+8 weeks)

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