DVR Stock: A Risky Investment

Outlook: DIVERGER LIMITED is assigned short-term Ba3 & long-term Ba1 estimated rating.
Dominant Strategy : Speculative Trend
Time series to forecast n: 24 Jun 2023 for 1 Year
Methodology : Statistical Inference (ML)

Summary

Diverger Limited is an Australian financial services company listed on the Australian Stock Exchange (ASX: DVR). It is a collective of leading accounting and wealth brands that leverage the infrastructure and capability that Diverger brings for the benefit of its professionals and the clients they serve. Diverger's Wealth brands include the award-winning GPS Wealth, Paragem, Merit Wealth and SMSF Expert. Its accounting services companies include the market leading knowledge and training company Knowledge Shop, in-house training leaders TaxBanter and TaxBytes. Diverger was founded in 2004 and is headquartered in Sydney, New South Wales. It has over 3,000 accounting practices, 150 financial planning firms and 529 licensed advisers as its clients. Diverger's mission is to create positive change in accounting and wealth. Its vision is to grow a collective of Australia's leading brands that leverage the infrastructure and capability that Diverger brings for the benefit of its professionals and the clients they serve.DIVERGER LIMITED prediction model is evaluated with Statistical Inference (ML) and Paired T-Test^1,2,3,4 and it is concluded that the DVR stock is predictable in the short/long term. Statistical inference is a process of drawing conclusions about a population based on data from a sample of that population. In machine learning (ML), statistical inference is used to make predictions about new data based on data that has already been seen. According to price forecasts for 1 Year period, the dominant strategy among neural network is: Speculative Trend

Key Points

1. Can statistics predict the future?
2. Operational Risk
3. Is it better to buy and sell or hold?

DVR Target Price Prediction Modeling Methodology

We consider DIVERGER LIMITED Decision Process with Statistical Inference (ML) where A is the set of discrete actions of DVR 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(Paired T-Test)^5,6,7= $\begin{array}{cccc}{p}_{\mathrm{a}1}& p_{\mathrm{a}2}& \dots & p_{1n}\\ & ⋮\\ p_{j1}& p_{j2}& \dots & p_{jn}\\ & ⋮\\ p_{k1}& p_{k2}& \dots & p_{kn}\\ & ⋮\\ p_{n1}& p_{n2}& \dots & p_{nn}\end{array}$ X R(Statistical Inference (ML)) X S(n):→ 1 Year $\sum _{i=1}^n\left(s_i\right)$

n:Time series to forecast

p:Price signals of DVR stock

j:Nash equilibria (Neural Network)

k:Dominated move

a:Best response for target price

Statistical Inference (ML)

Statistical inference is a process of drawing conclusions about a population based on data from a sample of that population. In machine learning (ML), statistical inference is used to make predictions about new data based on data that has already been seen.

Paired T-Test

A paired t-test is a statistical test that compares the means of two paired samples. In a paired t-test, each data point in one sample is paired with a data point in the other sample. The pairs are typically related in some way, such as before and after measurements, or measurements from the same subject under different conditions. The paired t-test is a parametric test, which means that it assumes that the data is normally distributed. The paired t-test is also a dependent samples test, which means that the data points in each pair are correlated.

 

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?

DVR Stock Forecast (Buy or Sell) for 1 Year

Sample Set: Neural Network
Stock/Index: DVR DIVERGER LIMITED
Time series to forecast n: 24 Jun 2023 for 1 Year

According to price forecasts for 1 Year period, the dominant strategy among neural network is: Speculative Trend

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 DIVERGER LIMITED

1. When an entity, consistent with its hedge documentation, frequently resets (ie discontinues and restarts) a hedging relationship because both the hedging instrument and the hedged item frequently change (ie the entity uses a dynamic process in which both the hedged items and the hedging instruments used to manage that exposure do not remain the same for long), the entity shall apply the requirement in paragraphs 6.3.7(a) and B6.3.8—that the risk component is separately identifiable—only when it initially designates a hedged item in that hedging relationship. A hedged item that has been assessed at the time of its initial designation in the hedging relationship, whether it was at the time of the hedge inception or subsequently, is not reassessed at any subsequent redesignation in the same hedging relationship.
2. Conversely, if the critical terms of the hedging instrument and the hedged item are not closely aligned, there is an increased level of uncertainty about the extent of offset. Consequently, the hedge effectiveness during the term of the hedging relationship is more difficult to predict. In such a situation it might only be possible for an entity to conclude on the basis of a quantitative assessment that an economic relationship exists between the hedged item and the hedging instrument (see paragraphs B6.4.4–B6.4.6). In some situations a quantitative assessment might also be needed to assess whether the hedge ratio used for designating the hedging relationship meets the hedge effectiveness requirements (see paragraphs B6.4.9–B6.4.11). An entity can use the same or different methods for those two different purposes.
3. If a collar, in the form of a purchased call and written put, prevents a transferred asset from being derecognised and the entity measures the asset at fair value, it continues to measure the asset at fair value. The associated liability is measured at (i) the sum of the call exercise price and fair value of the put option less the time value of the call option, if the call option is in or at the money, or (ii) the sum of the fair value of the asset and the fair value of the put option less the time value of the call option if the call option is out of the money. The adjustment to the associated liability ensures that the net carrying amount of the asset and the associated liability is the fair value of the options held and written by the entity. For example, assume an entity transfers a financial asset that is measured at fair value while simultaneously purchasing a call with an exercise price of CU120 and writing a put with an exercise price of CU80. Assume also that the fair value of the asset is CU100 at the date of the transfer. The time value of the put and call are CU1 and CU5 respectively. In this case, the entity recognises an asset of CU100 (the fair value of the asset) and a liability of CU96 [(CU100 + CU1) – CU5]. This gives a net asset value of CU4, which is the fair value of the options held and written by the entity.
4. For the purpose of applying the requirement in paragraph 6.5.12 in order to determine whether the hedged future cash flows are expected to occur, an entity shall assume that the interest rate benchmark on which the hedged cash flows (contractually or non-contractually specified) are based is not altered as a result of interest rate benchmark reform.

*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

DIVERGER LIMITED is assigned short-term Ba3 & long-term Ba1 estimated rating. DIVERGER LIMITED prediction model is evaluated with Statistical Inference (ML) and Paired T-Test^1,2,3,4 and it is concluded that the DVR stock is predictable in the short/long term.

According to price forecasts for 1 Year period, the dominant strategy among neural network is: Speculative Trend

DVR DIVERGER LIMITED Financial Analysis*

Rating	Short-Term	Long-Term Senior
Outlook*	Ba3	Ba1
Income Statement	Baa2	B2
Balance Sheet	B2	Baa2
Leverage Ratios	Baa2	Baa2
Cash Flow	Ba3	B3
Rates of Return and Profitability	Caa2	Baa2

*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 650 signals.

References

1. Wu X, Kumar V, Quinlan JR, Ghosh J, Yang Q, et al. 2008. Top 10 algorithms in data mining. Knowl. Inform. Syst. 14:1–37
2. Harris ZS. 1954. Distributional structure. Word 10:146–62
3. Zubizarreta JR. 2015. Stable weights that balance covariates for estimation with incomplete outcome data. J. Am. Stat. Assoc. 110:910–22
4. Schapire RE, Freund Y. 2012. Boosting: Foundations and Algorithms. Cambridge, MA: MIT Press
5. 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
6. Abadie A, Diamond A, Hainmueller J. 2015. Comparative politics and the synthetic control method. Am. J. Political Sci. 59:495–510
7. Hastie T, Tibshirani R, Tibshirani RJ. 2017. Extended comparisons of best subset selection, forward stepwise selection, and the lasso. arXiv:1707.08692 [stat.ME]

Frequently Asked Questions

Q: What is the prediction methodology for DVR stock?
A: DVR stock prediction methodology: We evaluate the prediction models Statistical Inference (ML) and Paired T-Test
Q: Is DVR stock a buy or sell?
A: The dominant strategy among neural network is to Speculative Trend DVR Stock.
Q: Is DIVERGER LIMITED stock a good investment?
A: The consensus rating for DIVERGER LIMITED is Speculative Trend and is assigned short-term Ba3 & long-term Ba1 estimated rating.
Q: What is the consensus rating of DVR stock?
A: The consensus rating for DVR is Speculative Trend.
Q: What is the prediction period for DVR stock?
A: The prediction period for DVR is 1 Year

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