Modelling A.I. in Economics

DGII Stock: A Strong Financial Position and Bright Future

Outlook: Digi International Inc. Common Stock is assigned short-term Ba3 & long-term B2 estimated rating.
AUC Score : What is AUC Score?
Short-Term Revised1 :
Dominant Strategy : Buy
Time series to forecast n: for Weeks2
Methodology : Active Learning (ML)
Hypothesis Testing : Multiple Regression
Surveillance : Major exchange and OTC

1The accuracy of the model is being monitored on a regular basis.(15-minute period)

2Time series is updated based on short-term trends.


Digi International Inc. Common Stock prediction model is evaluated with Active Learning (ML) and Multiple Regression1,2,3,4 and it is concluded that the DGII stock is predictable in the short/long term. Active learning (AL) is a machine learning (ML) method in which the model actively queries the user for labels on data points. This allows the model to learn more efficiently, as it is only learning about the data points that are most informative. According to price forecasts for 4 Weeks period, the dominant strategy among neural network is: Buy

Graph 5

Key Points

  1. What are buy sell or hold recommendations?
  2. Nash Equilibria
  3. Trust metric by Neural Network

DGII Target Price Prediction Modeling Methodology

We consider Digi International Inc. Common Stock Decision Process with Active Learning (ML) where A is the set of discrete actions of DGII 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(Active Learning (ML)) X S(n):→ 4 Weeks e x rx

n:Time series to forecast

p:Price signals of DGII stock

j:Nash equilibria (Neural Network)

k:Dominated move

a:Best response for target price

Active Learning (ML)

Active learning (AL) is a machine learning (ML) method in which the model actively queries the user for labels on data points. This allows the model to learn more efficiently, as it is only learning about the data points that are most informative.

Multiple Regression

Multiple regression is a statistical method that analyzes the relationship between a dependent variable and multiple independent variables. The dependent variable is the variable that is being predicted, and the independent variables are the variables that are used to predict the dependent variable. Multiple regression is a more complex statistical method than simple linear regression, which only analyzes the relationship between a dependent variable and one independent variable. Multiple regression can be used to analyze more complex relationships between variables, and it can also be used to control for confounding variables. A confounding variable is a variable that is correlated with both the dependent variable and one or more of the independent variables. Confounding variables can distort the relationship between the dependent variable and the independent variables. Multiple regression can be used to control for confounding variables by including them in the model.

 

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?

DGII Stock Forecast (Buy or Sell)

Sample Set: Neural Network
Stock/Index: DGII Digi International Inc. Common Stock
Time series to forecast: 4 Weeks

According to price forecasts, the dominant strategy among neural network is: Buy

Strategic Interaction Table Legend:

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%

Financial Data Adjustments for Active Learning (ML) based DGII Stock Prediction Model

  1. However, depending on the nature of the financial instruments and the credit risk information available for particular groups of financial instruments, an entity may not be able to identify significant changes in credit risk for individual financial instruments before the financial instrument becomes past due. This may be the case for financial instruments such as retail loans for which there is little or no updated credit risk information that is routinely obtained and monitored on an individual instrument until a customer breaches the contractual terms. If changes in the credit risk for individual financial instruments are not captured before they become past due, a loss allowance based only on credit information at an individual financial instrument level would not faithfully represent the changes in credit risk since initial recognition.
  2. In almost every lending transaction the creditor's instrument is ranked relative to the instruments of the debtor's other creditors. An instrument that is subordinated to other instruments may have contractual cash flows that are payments of principal and interest on the principal amount outstanding if the debtor's non-payment is a breach of contract and the holder has a contractual right to unpaid amounts of principal and interest on the principal amount outstanding even in the event of the debtor's bankruptcy. For example, a trade receivable that ranks its creditor as a general creditor would qualify as having payments of principal and interest on the principal amount outstanding. This is the case even if the debtor issued loans that are collateralised, which in the event of bankruptcy would give that loan holder priority over the claims of the general creditor in respect of the collateral but does not affect the contractual right of the general creditor to unpaid principal and other amounts due.
  3. The decision of an entity to designate a financial asset or financial liability as at fair value through profit or loss is similar to an accounting policy choice (although, unlike an accounting policy choice, it is not required to be applied consistently to all similar transactions). When an entity has such a choice, paragraph 14(b) of IAS 8 requires the chosen policy to result in the financial statements providing reliable and more relevant information about the effects of transactions, other events and conditions on the entity's financial position, financial performance or cash flows. For example, in the case of designation of a financial liability as at fair value through profit or loss, paragraph 4.2.2 sets out the two circumstances when the requirement for more relevant information will be met. Accordingly, to choose such designation in accordance with paragraph 4.2.2, the entity needs to demonstrate that it falls within one (or both) of these two circumstances.
  4. Credit risk analysis is a multifactor and holistic analysis; whether a specific factor is relevant, and its weight compared to other factors, will depend on the type of product, characteristics of the financial instruments and the borrower as well as the geographical region. An entity shall consider reasonable and supportable information that is available without undue cost or effort and that is relevant for the particular financial instrument being assessed. However, some factors or indicators may not be identifiable on an individual financial instrument level. In such a case, the factors or indicators should be assessed for appropriate portfolios, groups of portfolios or portions of a portfolio of financial instruments to determine whether the requirement in paragraph 5.5.3 for the recognition of lifetime expected credit losses has been met.

*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.

DGII Digi International Inc. Common Stock Financial Analysis*

Rating Short-Term Long-Term Senior
Outlook*Ba3B2
Income StatementBaa2B2
Balance SheetCaa2B1
Leverage RatiosBa3B1
Cash FlowB2Caa2
Rates of Return and ProfitabilityBa2Caa2

*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?

References

  1. J. Spall. Multivariate stochastic approximation using a simultaneous perturbation gradient approximation. IEEE Transactions on Automatic Control, 37(3):332–341, 1992.
  2. Robins J, Rotnitzky A. 1995. Semiparametric efficiency in multivariate regression models with missing data. J. Am. Stat. Assoc. 90:122–29
  3. Hirano K, Porter JR. 2009. Asymptotics for statistical treatment rules. Econometrica 77:1683–701
  4. Bell RM, Koren Y. 2007. Lessons from the Netflix prize challenge. ACM SIGKDD Explor. Newsl. 9:75–79
  5. Jorgenson, D.W., Weitzman, M.L., ZXhang, Y.X., Haxo, Y.M. and Mat, Y.X., 2023. Google's Stock Price Set to Soar in the Next 3 Months. AC Investment Research Journal, 220(44).
  6. Bai J, Ng S. 2017. Principal components and regularized estimation of factor models. arXiv:1708.08137 [stat.ME]
  7. Bessler, D. A. T. Covey (1991), "Cointegration: Some results on U.S. cattle prices," Journal of Futures Markets, 11, 461–474.
Frequently Asked QuestionsQ: What is the prediction methodology for DGII stock?
A: DGII stock prediction methodology: We evaluate the prediction models Active Learning (ML) and Multiple Regression
Q: Is DGII stock a buy or sell?
A: The dominant strategy among neural network is to Buy DGII Stock.
Q: Is Digi International Inc. Common Stock stock a good investment?
A: The consensus rating for Digi International Inc. Common Stock is Buy and is assigned short-term Ba3 & long-term B2 estimated rating.
Q: What is the consensus rating of DGII stock?
A: The consensus rating for DGII is Buy.
Q: What is the prediction period for DGII stock?
A: The prediction period for DGII is 4 Weeks

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