Modelling A.I. in Economics

Where Will LDI Stock Be in 1 Year?

Outlook: loanDepot Inc. Class A Common Stock is assigned short-term Ba1 & long-term Ba1 estimated rating.
Dominant Strategy : Hold
Time series to forecast n: 11 Jun 2023 for 1 Year
Methodology : Transductive Learning (ML)

Abstract

loanDepot Inc. Class A Common Stock prediction model is evaluated with Transductive Learning (ML) and ElasticNet Regression1,2,3,4 and it is concluded that the LDI stock is predictable in the short/long term. Transductive learning is a supervised machine learning (ML) method in which the model is trained on both labeled and unlabeled data. The goal of transductive learning is to predict the labels of the unlabeled data. Transductive learning is a hybrid of inductive and semi-supervised learning. Inductive learning algorithms are trained on labeled data only, while semi-supervised learning algorithms are trained on a combination of labeled and unlabeled data. Transductive learning algorithms can achieve better performance than inductive learning algorithms on tasks where there is a small amount of labeled data. This is because transductive learning algorithms can use the unlabeled data to help them learn the relationships between the features and the labels. According to price forecasts for 1 Year period, the dominant strategy among neural network is: Hold

Graph 15

Key Points

  1. Market Signals
  2. Buy, Sell and Hold Signals
  3. Technical Analysis with Algorithmic Trading

LDI Target Price Prediction Modeling Methodology

We consider loanDepot Inc. Class A Common Stock Decision Process with Transductive Learning (ML) where A is the set of discrete actions of LDI 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(ElasticNet 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(Transductive Learning (ML)) X S(n):→ 1 Year i = 1 n s i

n:Time series to forecast

p:Price signals of LDI stock

j:Nash equilibria (Neural Network)

k:Dominated move

a:Best response for target price

Transductive Learning (ML)

Transductive learning is a supervised machine learning (ML) method in which the model is trained on both labeled and unlabeled data. The goal of transductive learning is to predict the labels of the unlabeled data. Transductive learning is a hybrid of inductive and semi-supervised learning. Inductive learning algorithms are trained on labeled data only, while semi-supervised learning algorithms are trained on a combination of labeled and unlabeled data. Transductive learning algorithms can achieve better performance than inductive learning algorithms on tasks where there is a small amount of labeled data. This is because transductive learning algorithms can use the unlabeled data to help them learn the relationships between the features and the labels.

ElasticNet Regression

Elastic net regression is a type of regression analysis that combines the benefits of ridge regression and lasso regression. It is a regularized regression method that adds a penalty to the least squares objective function in order to reduce the variance of the estimates, induce sparsity in the model, and reduce overfitting. This is done by adding a term to the objective function that is proportional to the sum of the squares of the coefficients and the sum of the absolute values of the coefficients. The penalty terms are controlled by two parameters, called the ridge constant and the lasso constant. Elastic net regression can be used to address the problems of multicollinearity, overfitting, and sensitivity to outliers. It is a more flexible method than ridge regression or lasso regression, and it can often achieve better results.

 

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?

LDI Stock Forecast (Buy or Sell) for 1 Year

Sample Set: Neural Network
Stock/Index: LDI loanDepot Inc. Class A Common Stock
Time series to forecast n: 11 Jun 2023 for 1 Year

According to price forecasts for 1 Year 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 loanDepot Inc. Class A Common Stock

  1. Adjusting the hedge ratio allows an entity to respond to changes in the relationship between the hedging instrument and the hedged item that arise from their underlyings or risk variables. For example, a hedging relationship in which the hedging instrument and the hedged item have different but related underlyings changes in response to a change in the relationship between those two underlyings (for example, different but related reference indices, rates or prices). Hence, rebalancing allows the continuation of a hedging relationship in situations in which the relationship between the hedging instrument and the hedged item chang
  2. Sales that occur for other reasons, such as sales made to manage credit concentration risk (without an increase in the assets' credit risk), may also be consistent with a business model whose objective is to hold financial assets in order to collect contractual cash flows. In particular, such sales may be consistent with a business model whose objective is to hold financial assets in order to collect contractual cash flows if those sales are infrequent (even if significant in value) or insignificant in value both individually and in aggregate (even if frequent). If more than an infrequent number of such sales are made out of a portfolio and those sales are more than insignificant in value (either individually or in aggregate), the entity needs to assess whether and how such sales are consistent with an objective of collecting contractual cash flows. Whether a third party imposes the requirement to sell the financial assets, or that activity is at the entity's discretion, is not relevant to this assessment. An increase in the frequency or value of sales in a particular period is not necessarily inconsistent with an objective to hold financial assets in order to collect contractual cash flows, if an entity can explain the reasons for those sales and demonstrate why those sales do not reflect a change in the entity's business model. In addition, sales may be consistent with the objective of holding financial assets in order to collect contractual cash flows if the sales are made close to the maturity of the financial assets and the proceeds from the sales approximate the collection of the remaining contractual cash flows.
  3. Expected credit losses are a probability-weighted estimate of credit losses (ie the present value of all cash shortfalls) over the expected life of the financial instrument. A cash shortfall is the difference between the cash flows that are due to an entity in accordance with the contract and the cash flows that the entity expects to receive. Because expected credit losses consider the amount and timing of payments, a credit loss arises even if the entity expects to be paid in full but later than when contractually due.
  4. To the extent that a transfer of a financial asset does not qualify for derecognition, the transferee does not recognise the transferred asset as its asset. The transferee derecognises the cash or other consideration paid and recognises a receivable from the transferor. If the transferor has both a right and an obligation to reacquire control of the entire transferred asset for a fixed amount (such as under a repurchase agreement), the transferee may measure its receivable at amortised cost if it meets the criteria in paragraph 4.1.2.

*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

loanDepot Inc. Class A Common Stock is assigned short-term Ba1 & long-term Ba1 estimated rating. loanDepot Inc. Class A Common Stock prediction model is evaluated with Transductive Learning (ML) and ElasticNet Regression1,2,3,4 and it is concluded that the LDI stock is predictable in the short/long term. According to price forecasts for 1 Year period, the dominant strategy among neural network is: Hold

LDI loanDepot Inc. Class A Common Stock Financial Analysis*

Rating Short-Term Long-Term Senior
Outlook*Ba1Ba1
Income StatementBaa2Ba3
Balance SheetB1B1
Leverage RatiosBaa2Baa2
Cash FlowBaa2C
Rates of Return and ProfitabilityB1C

*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: 75 out of 100 with 458 signals.

References

  1. Bennett J, Lanning S. 2007. The Netflix prize. In Proceedings of KDD Cup and Workshop 2007, p. 35. New York: ACM
  2. Abadir, K. M., K. Hadri E. Tzavalis (1999), "The influence of VAR dimensions on estimator biases," Econometrica, 67, 163–181.
  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. Arora S, Li Y, Liang Y, Ma T. 2016. RAND-WALK: a latent variable model approach to word embeddings. Trans. Assoc. Comput. Linguist. 4:385–99
  5. Blei DM, Lafferty JD. 2009. Topic models. In Text Mining: Classification, Clustering, and Applications, ed. A Srivastava, M Sahami, pp. 101–24. Boca Raton, FL: CRC Press
  6. Hoerl AE, Kennard RW. 1970. Ridge regression: biased estimation for nonorthogonal problems. Technometrics 12:55–67
  7. Chamberlain G. 2000. Econometrics and decision theory. J. Econom. 95:255–83
Frequently Asked QuestionsQ: What is the prediction methodology for LDI stock?
A: LDI stock prediction methodology: We evaluate the prediction models Transductive Learning (ML) and ElasticNet Regression
Q: Is LDI stock a buy or sell?
A: The dominant strategy among neural network is to Hold LDI Stock.
Q: Is loanDepot Inc. Class A Common Stock stock a good investment?
A: The consensus rating for loanDepot Inc. Class A Common Stock is Hold and is assigned short-term Ba1 & long-term Ba1 estimated rating.
Q: What is the consensus rating of LDI stock?
A: The consensus rating for LDI is Hold.
Q: What is the prediction period for LDI stock?
A: The prediction period for LDI is 1 Year

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