Should You Buy Now or Wait? LON:PNN Stock Forecast

Outlook: PENNON GROUP PLC is assigned short-term Ba1 & long-term Ba1 estimated rating.
Dominant Strategy : Buy
Time series to forecast n: 15 Jun 2023 for 4 Weeks
Methodology : Modular Neural Network (Financial Sentiment Analysis)

Abstract

PENNON GROUP PLC prediction model is evaluated with Modular Neural Network (Financial Sentiment Analysis) and Polynomial Regression^1,2,3,4 and it is concluded that the LON:PNN stock is predictable in the short/long term. Modular neural networks (MNNs) are a type of artificial neural network that can be used for financial sentiment analysis. MNNs are made up of multiple smaller neural networks, called modules. Each module is responsible for learning a specific task, such as identifying sentiment in text or identifying patterns in data. The modules are then combined to form a single neural network that can perform multiple tasks. In the context of financial sentiment analysis, MNNs can be used to identify the sentiment of financial news articles, social media posts, and other forms of online content. This information can then be used to make investment decisions, to identify trends in the market, and to target investors with relevant advertising. According to price forecasts for 4 Weeks period, the dominant strategy among neural network is: Buy

Key Points

1. What are the most successful trading algorithms?
2. How do you know when a stock will go up or down?
3. Stock Rating

LON:PNN Target Price Prediction Modeling Methodology

We consider PENNON GROUP PLC Decision Process with Modular Neural Network (Financial Sentiment Analysis) where A is the set of discrete actions of LON:PNN 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(Polynomial Regression)^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(Modular Neural Network (Financial Sentiment Analysis)) X S(n):→ 4 Weeks $\overrightarrow{R}=\left(r_1,r_2,r_3\right)$

n:Time series to forecast

p:Price signals of LON:PNN stock

j:Nash equilibria (Neural Network)

k:Dominated move

a:Best response for target price

Modular Neural Network (Financial Sentiment Analysis)

Modular neural networks (MNNs) are a type of artificial neural network that can be used for financial sentiment analysis. MNNs are made up of multiple smaller neural networks, called modules. Each module is responsible for learning a specific task, such as identifying sentiment in text or identifying patterns in data. The modules are then combined to form a single neural network that can perform multiple tasks. In the context of financial sentiment analysis, MNNs can be used to identify the sentiment of financial news articles, social media posts, and other forms of online content. This information can then be used to make investment decisions, to identify trends in the market, and to target investors with relevant advertising.

Polynomial Regression

Polynomial regression is a type of regression analysis that uses a polynomial function to model the relationship between a dependent variable and one or more independent variables. Polynomial functions are mathematical functions that have a polynomial term, which is a term that is raised to a power greater than 1. In polynomial regression, the dependent variable is modeled as a polynomial function of the independent variables. The degree of the polynomial function is determined by the researcher. The higher the degree of the polynomial function, the more complex the model will be.

 

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:PNN Stock Forecast (Buy or Sell) for 4 Weeks

Sample Set: Neural Network
Stock/Index: LON:PNN PENNON GROUP PLC
Time series to forecast n: 15 Jun 2023 for 4 Weeks

According to price forecasts for 4 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 PENNON GROUP PLC

1. For the avoidance of doubt, the effects of replacing the original counterparty with a clearing counterparty and making the associated changes as described in paragraph 6.5.6 shall be reflected in the measurement of the hedging instrument and therefore in the assessment of hedge effectiveness and the measurement of hedge effectiveness
2. If, at the date of initial application, it is impracticable (as defined in IAS 8) for an entity to assess a modified time value of money element in accordance with paragraphs B4.1.9B–B4.1.9D on the basis of the facts and circumstances that existed at the initial recognition of the financial asset, an entity shall assess the contractual cash flow characteristics of that financial asset on the basis of the facts and circumstances that existed at the initial recognition of the financial asset without taking into account the requirements related to the modification of the time value of money element in paragraphs B4.1.9B–B4.1.9D. (See also paragraph 42R of IFRS 7.)
3. To calculate the change in the value of the hedged item for the purpose of measuring hedge ineffectiveness, an entity may use a derivative that would have terms that match the critical terms of the hedged item (this is commonly referred to as a 'hypothetical derivative'), and, for example for a hedge of a forecast transaction, would be calibrated using the hedged price (or rate) level. For example, if the hedge was for a two-sided risk at the current market level, the hypothetical derivative would represent a hypothetical forward contract that is calibrated to a value of nil at the time of designation of the hedging relationship. If the hedge was for example for a one-sided risk, the hypothetical derivative would represent the intrinsic value of a hypothetical option that at the time of designation of the hedging relationship is at the money if the hedged price level is the current market level, or out of the money if the hedged price level is above (or, for a hedge of a long position, below) the current market level. Using a hypothetical derivative is one possible way of calculating the change in the value of the hedged item. The hypothetical derivative replicates the hedged item and hence results in the same outcome as if that change in value was determined by a different approach. Hence, using a 'hypothetical derivative' is not a method in its own right but a mathematical expedient that can only be used to calculate the value of the hedged item. Consequently, a 'hypothetical derivative' cannot be used to include features in the value of the hedged item that only exist in the hedging instrument (but not in the hedged item). An example is debt denominated in a foreign currency (irrespective of whether it is fixed-rate or variable-rate debt). When using a hypothetical derivative to calculate the change in the value of such debt or the present value of the cumulative change in its cash flows, the hypothetical derivative cannot simply impute a charge for exchanging different currencies even though actual derivatives under which different currencies are exchanged might include such a charge (for example, cross-currency interest rate swaps).
4. When applying the effective interest method, an entity generally amortises any fees, points paid or received, transaction costs and other premiums or discounts that are included in the calculation of the effective interest rate over the expected life of the financial instrument. However, a shorter period is used if this is the period to which the fees, points paid or received, transaction costs, premiums or discounts relate. This will be the case when the variable to which the fees, points paid or received, transaction costs, premiums or discounts relate is repriced to market rates before the expected maturity of the financial instrument. In such a case, the appropriate amortisation period is the period to the next such repricing date. For example, if a premium or discount on a floating-rate financial instrument reflects the interest that has accrued on that financial instrument since the interest was last paid, or changes in the market rates since the floating interest rate was reset to the market rates, it will be amortised to the next date when the floating interest is reset to market rates. This is because the premium or discount relates to the period to the next interest reset date because, at that date, the variable to which the premium or discount relates (ie interest rates) is reset to the market rates. If, however, the premium or discount results from a change in the credit spread over the floating rate specified in the financial instrument, or other variables that are not reset to the market rates, it is amortised over the expected life of the financial instrument.

*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

PENNON GROUP PLC is assigned short-term Ba1 & long-term Ba1 estimated rating. PENNON GROUP PLC prediction model is evaluated with Modular Neural Network (Financial Sentiment Analysis) and Polynomial Regression^1,2,3,4 and it is concluded that the LON:PNN stock is predictable in the short/long term. According to price forecasts for 4 Weeks period, the dominant strategy among neural network is: Buy

LON:PNN PENNON GROUP PLC Financial Analysis*

Rating	Short-Term	Long-Term Senior
Outlook*	Ba1	Ba1
Income Statement	Caa2	B2
Balance Sheet	Baa2	C
Leverage Ratios	Baa2	Ba2
Cash Flow	Ba1	Baa2
Rates of Return and Profitability	Baa2	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: 77 out of 100 with 559 signals.

References

1. uyer, S. Whiteson, B. Bakker, and N. A. Vlassis. Multiagent reinforcement learning for urban traffic control using coordination graphs. In Machine Learning and Knowledge Discovery in Databases, European Conference, ECML/PKDD 2008, Antwerp, Belgium, September 15-19, 2008, Proceedings, Part I, pages 656–671, 2008.
2. A. Tamar, Y. Glassner, and S. Mannor. Policy gradients beyond expectations: Conditional value-at-risk. In AAAI, 2015
3. Bessler, D. A. R. A. Babula, (1987), "Forecasting wheat exports: Do exchange rates matter?" Journal of Business and Economic Statistics, 5, 397–406.
4. Rumelhart DE, Hinton GE, Williams RJ. 1986. Learning representations by back-propagating errors. Nature 323:533–36
5. Çetinkaya, A., Zhang, Y.Z., Hao, Y.M. and Ma, X.Y., When to Sell and When to Hold FTNT Stock. AC Investment Research Journal, 101(3).
6. Clements, M. P. D. F. Hendry (1995), "Forecasting in cointegrated systems," Journal of Applied Econometrics, 10, 127–146.
7. Imai K, Ratkovic M. 2013. Estimating treatment effect heterogeneity in randomized program evaluation. Ann. Appl. Stat. 7:443–70

Frequently Asked Questions

Q: What is the prediction methodology for LON:PNN stock?
A: LON:PNN stock prediction methodology: We evaluate the prediction models Modular Neural Network (Financial Sentiment Analysis) and Polynomial Regression
Q: Is LON:PNN stock a buy or sell?
A: The dominant strategy among neural network is to Buy LON:PNN Stock.
Q: Is PENNON GROUP PLC stock a good investment?
A: The consensus rating for PENNON GROUP PLC is Buy and is assigned short-term Ba1 & long-term Ba1 estimated rating.
Q: What is the consensus rating of LON:PNN stock?
A: The consensus rating for LON:PNN is Buy.
Q: What is the prediction period for LON:PNN stock?
A: The prediction period for LON:PNN is 4 Weeks

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