Modelling A.I. in Economics

YUM Yum! Brands Inc. (Forecast)

Outlook: Yum! Brands Inc. is assigned short-term Ba1 & long-term Ba1 estimated rating.
Dominant Strategy : Buy
Time series to forecast n: 18 May 2023 for (n+6 month)
Methodology : Inductive Learning (ML)

Abstract

Yum! Brands Inc. prediction model is evaluated with Inductive Learning (ML) and Multiple Regression1,2,3,4 and it is concluded that the YUM stock is predictable in the short/long term. According to price forecasts for (n+6 month) period, the dominant strategy among neural network is: Buy

Key Points

  1. Fundemental Analysis with Algorithmic Trading
  2. Market Signals
  3. What is prediction in deep learning?

YUM Target Price Prediction Modeling Methodology

We consider Yum! Brands Inc. Decision Process with Inductive Learning (ML) where A is the set of discrete actions of YUM 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(Multiple 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(Inductive Learning (ML)) X S(n):→ (n+6 month) S = s 1 s 2 s 3

n:Time series to forecast

p:Price signals of YUM 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?

YUM Stock Forecast (Buy or Sell) for (n+6 month)

Sample Set: Neural Network
Stock/Index: YUM Yum! Brands Inc.
Time series to forecast n: 18 May 2023 for (n+6 month)

According to price forecasts for (n+6 month) 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 Yum! Brands Inc.

  1. One of the defining characteristics of a derivative is that it has an initial net investment that is smaller than would be required for other types of contracts that would be expected to have a similar response to changes in market factors. An option contract meets that definition because the premium is less than the investment that would be required to obtain the underlying financial instrument to which the option is linked. A currency swap that requires an initial exchange of different currencies of equal fair values meets the definition because it has a zero initial net investment.
  2. If an entity originates a loan that bears an off-market interest rate (eg 5 per cent when the market rate for similar loans is 8 per cent), and receives an upfront fee as compensation, the entity recognises the loan at its fair value, ie net of the fee it receives.
  3. Despite the requirement in paragraph 7.2.1, an entity that adopts the classification and measurement requirements of this Standard (which include the requirements related to amortised cost measurement for financial assets and impairment in Sections 5.4 and 5.5) shall provide the disclosures set out in paragraphs 42L–42O of IFRS 7 but need not restate prior periods. The entity may restate prior periods if, and only if, it is possible without the use of hindsight. 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 in the opening retained earnings (or other component of equity, as appropriate) of the annual reporting period that includes the date of initial application. However, if an entity restates prior periods, the restated financial statements must reflect all of the requirements in this Standard. If an entity's chosen approach to applying IFRS 9 results in more than one date of initial application for different requirements, this paragraph applies at each date of initial application (see paragraph 7.2.2). This would be the case, for example, if an entity elects to early apply only the requirements for the presentation of gains and losses on financial liabilities designated as at fair value through profit or loss in accordance with paragraph 7.1.2 before applying the other requirements in this Standard.
  4. 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.

*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

Yum! Brands Inc. is assigned short-term Ba1 & long-term Ba1 estimated rating. Yum! Brands Inc. prediction model is evaluated with Inductive Learning (ML) and Multiple Regression1,2,3,4 and it is concluded that the YUM stock is predictable in the short/long term. According to price forecasts for (n+6 month) period, the dominant strategy among neural network is: Buy

YUM Yum! Brands Inc. Financial Analysis*

Rating Short-Term Long-Term Senior
Outlook*Ba1Ba1
Income StatementBaa2Ba3
Balance SheetBa1Baa2
Leverage RatiosB3B3
Cash FlowCaa2Baa2
Rates of Return and ProfitabilityB3C

*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 685 signals.

References

  1. Cortes C, Vapnik V. 1995. Support-vector networks. Mach. Learn. 20:273–97
  2. Dudik M, Langford J, Li L. 2011. Doubly robust policy evaluation and learning. In Proceedings of the 28th International Conference on Machine Learning, pp. 1097–104. La Jolla, CA: Int. Mach. Learn. Soc.
  3. J. N. Foerster, Y. M. Assael, N. de Freitas, and S. Whiteson. Learning to communicate with deep multi-agent reinforcement learning. In Advances in Neural Information Processing Systems 29: Annual Conference on Neural Information Processing Systems 2016, December 5-10, 2016, Barcelona, Spain, pages 2137–2145, 2016.
  4. Meinshausen N. 2007. Relaxed lasso. Comput. Stat. Data Anal. 52:374–93
  5. V. Borkar. Stochastic approximation: a dynamical systems viewpoint. Cambridge University Press, 2008
  6. Chernozhukov V, Chetverikov D, Demirer M, Duflo E, Hansen C, Newey W. 2017. Double/debiased/ Neyman machine learning of treatment effects. Am. Econ. Rev. 107:261–65
  7. Burgess, D. F. (1975), "Duality theory and pitfalls in the specification of technologies," Journal of Econometrics, 3, 105–121.
Frequently Asked QuestionsQ: What is the prediction methodology for YUM stock?
A: YUM stock prediction methodology: We evaluate the prediction models Inductive Learning (ML) and Multiple Regression
Q: Is YUM stock a buy or sell?
A: The dominant strategy among neural network is to Buy YUM Stock.
Q: Is Yum! Brands Inc. stock a good investment?
A: The consensus rating for Yum! Brands Inc. is Buy and is assigned short-term Ba1 & long-term Ba1 estimated rating.
Q: What is the consensus rating of YUM stock?
A: The consensus rating for YUM is Buy.
Q: What is the prediction period for YUM stock?
A: The prediction period for YUM is (n+6 month)

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