Modelling A.I. in Economics

Where Will MG:TSX Stock Be in 3 Month? (Forecast)

Outlook: Magna International Inc. is assigned short-term B2 & long-term Baa2 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 : ElasticNet 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.

Abstract

Magna International Inc. prediction model is evaluated with Active Learning (ML) and ElasticNet Regression1,2,3,4 and it is concluded that the MG:TSX 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 3 Month period, the dominant strategy among neural network is: Buy

Graph 12

Key Points

  1. Stock Rating
  2. Is it better to buy and sell or hold?
  3. Short/Long Term Stocks

MG:TSX Target Price Prediction Modeling Methodology

We consider Magna International Inc. Decision Process with Active Learning (ML) where A is the set of discrete actions of MG:TSX 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(Active Learning (ML)) X S(n):→ 3 Month R = r 1 r 2 r 3

n:Time series to forecast

p:Price signals of MG:TSX 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.

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?

MG:TSX Stock Forecast (Buy or Sell)

Sample Set: Neural Network
Stock/Index: MG:TSX Magna International Inc.
Time series to forecast: 3 Month

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 MG:TSX Stock Prediction Model

  1. For the purpose of recognising foreign exchange gains and losses under IAS 21, a financial asset measured at fair value through other comprehensive income in accordance with paragraph 4.1.2A is treated as a monetary item. Accordingly, such a financial asset is treated as an asset measured at amortised cost in the foreign currency. Exchange differences on the amortised cost are recognised in profit or loss and other changes in the carrying amount are recognised in accordance with paragraph 5.7.10.
  2. An entity is not required to incorporate forecasts of future conditions over the entire expected life of a financial instrument. The degree of judgement that is required to estimate expected credit losses depends on the availability of detailed information. As the forecast horizon increases, the availability of detailed information decreases and the degree of judgement required to estimate expected credit losses increases. The estimate of expected credit losses does not require a detailed estimate for periods that are far in the future—for such periods, an entity may extrapolate projections from available, detailed information.
  3. The fair value of a financial instrument at initial recognition is normally the transaction price (ie the fair value of the consideration given or received, see also paragraph B5.1.2A and IFRS 13). However, if part of the consideration given or received is for something other than the financial instrument, an entity shall measure the fair value of the financial instrument. For example, the fair value of a long-term loan or receivable that carries no interest can be measured as the present value of all future cash receipts discounted using the prevailing market rate(s) of interest for a similar instrument (similar as to currency, term, type of interest rate and other factors) with a similar credit rating. Any additional amount lent is an expense or a reduction of income unless it qualifies for recognition as some other type of asset.
  4. Expected credit losses shall be discounted to the reporting date, not to the expected default or some other date, using the effective interest rate determined at initial recognition or an approximation thereof. If a financial instrument has a variable interest rate, expected credit losses shall be discounted using the current effective interest rate determined in accordance with paragraph B5.4.5.

*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.

MG:TSX Magna International Inc. Financial Analysis*

Rating Short-Term Long-Term Senior
Outlook*B2Baa2
Income StatementBaa2Baa2
Balance SheetCaa2Baa2
Leverage RatiosCaa2Baa2
Cash FlowB2Caa2
Rates of Return and ProfitabilityB2Baa2

*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?

Conclusions

Magna International Inc. is assigned short-term B2 & long-term Baa2 estimated rating. Magna International Inc. prediction model is evaluated with Active Learning (ML) and ElasticNet Regression1,2,3,4 and it is concluded that the MG:TSX stock is predictable in the short/long term. According to price forecasts for 3 Month period, the dominant strategy among neural network is: Buy

Prediction Confidence Score

Trust metric by Neural Network: 85 out of 100 with 846 signals.

References

  1. L. Busoniu, R. Babuska, and B. D. Schutter. A comprehensive survey of multiagent reinforcement learning. IEEE Transactions of Systems, Man, and Cybernetics Part C: Applications and Reviews, 38(2), 2008.
  2. Bengio Y, Ducharme R, Vincent P, Janvin C. 2003. A neural probabilistic language model. J. Mach. Learn. Res. 3:1137–55
  3. Semenova V, Goldman M, Chernozhukov V, Taddy M. 2018. Orthogonal ML for demand estimation: high dimensional causal inference in dynamic panels. arXiv:1712.09988 [stat.ML]
  4. 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).
  5. Chernozhukov V, Chetverikov D, Demirer M, Duflo E, Hansen C, et al. 2018a. Double/debiased machine learning for treatment and structural parameters. Econom. J. 21:C1–68
  6. Breusch, T. S. (1978), "Testing for autocorrelation in dynamic linear models," Australian Economic Papers, 17, 334–355.
  7. Dimakopoulou M, Athey S, Imbens G. 2017. Estimation considerations in contextual bandits. arXiv:1711.07077 [stat.ML]
Frequently Asked QuestionsQ: What is the prediction methodology for MG:TSX stock?
A: MG:TSX stock prediction methodology: We evaluate the prediction models Active Learning (ML) and ElasticNet Regression
Q: Is MG:TSX stock a buy or sell?
A: The dominant strategy among neural network is to Buy MG:TSX Stock.
Q: Is Magna International Inc. stock a good investment?
A: The consensus rating for Magna International Inc. is Buy and is assigned short-term B2 & long-term Baa2 estimated rating.
Q: What is the consensus rating of MG:TSX stock?
A: The consensus rating for MG:TSX is Buy.
Q: What is the prediction period for MG:TSX stock?
A: The prediction period for MG:TSX is 3 Month

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