Modelling A.I. in Economics

LON:POLR Stock Forecast: A Sell For The Next 1 Year

Outlook: POLAR CAPITAL HOLDINGS PLC is assigned short-term B3 & long-term Baa2 estimated rating.
AUC Score : What is AUC Score?
Short-Term Revised1 :
Dominant Strategy : Sell
Time series to forecast n: for Weeks2
Methodology : Reinforcement Machine Learning (ML)
Hypothesis Testing : Stepwise 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.


POLAR CAPITAL HOLDINGS PLC prediction model is evaluated with Reinforcement Machine Learning (ML) and Stepwise Regression1,2,3,4 and it is concluded that the LON:POLR stock is predictable in the short/long term. Reinforcement machine learning (RL) is a type of machine learning where an agent learns to take actions in an environment in order to maximize a reward. The agent does this by trial and error, and is able to learn from its mistakes. RL is a powerful tool that can be used for a variety of tasks, including game playing, robotics, and finance. According to price forecasts for 1 Year period, the dominant strategy among neural network is: Sell

Graph 16

Key Points

  1. What are the most successful trading algorithms?
  2. Short/Long Term Stocks
  3. Market Signals

LON:POLR Target Price Prediction Modeling Methodology

We consider POLAR CAPITAL HOLDINGS PLC Decision Process with Reinforcement Machine Learning (ML) where A is the set of discrete actions of LON:POLR 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(Stepwise 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(Reinforcement Machine Learning (ML)) X S(n):→ 1 Year e x rx

n:Time series to forecast

p:Price signals of LON:POLR stock

j:Nash equilibria (Neural Network)

k:Dominated move

a:Best response for target price

Reinforcement Machine Learning (ML)

Reinforcement machine learning (RL) is a type of machine learning where an agent learns to take actions in an environment in order to maximize a reward. The agent does this by trial and error, and is able to learn from its mistakes. RL is a powerful tool that can be used for a variety of tasks, including game playing, robotics, and finance.

Stepwise Regression

Stepwise regression is a method of variable selection in which variables are added or removed from a model one at a time, based on their statistical significance. There are two main types of stepwise regression: forward selection and backward elimination. In forward selection, variables are added to the model one at a time, starting with the variable with the highest F-statistic. The F-statistic is a measure of how much improvement in the model is gained by adding the variable. Variables are added to the model until no variable adds a statistically significant improvement to 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?

LON:POLR Stock Forecast (Buy or Sell)

Sample Set: Neural Network
Stock/Index: LON:POLR POLAR CAPITAL HOLDINGS PLC
Time series to forecast: 1 Year

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

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 Reinforcement Machine Learning (ML) based LON:POLR Stock Prediction Model

  1. In some circumstances an entity does not have reasonable and supportable information that is available without undue cost or effort to measure lifetime expected credit losses on an individual instrument basis. In that case, lifetime expected credit losses shall be recognised on a collective basis that considers comprehensive credit risk information. This comprehensive credit risk information must incorporate not only past due information but also all relevant credit information, including forward-looking macroeconomic information, in order to approximate the result of recognising lifetime expected credit losses when there has been a significant increase in credit risk since initial recognition on an individual instrument level.
  2. 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.
  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. For the purposes of applying the requirement in paragraph 5.7.7(a), credit risk is different from asset-specific performance risk. Asset-specific performance risk is not related to the risk that an entity will fail to discharge a particular obligation but instead it is related to the risk that a single asset or a group of assets will perform poorly (or not at all).

*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.

LON:POLR POLAR CAPITAL HOLDINGS PLC Financial Analysis*

Rating Short-Term Long-Term Senior
Outlook*B3Baa2
Income StatementBa1Baa2
Balance SheetCBaa2
Leverage RatiosBaa2Baa2
Cash FlowCB3
Rates of Return and ProfitabilityCBaa2

*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. Mullainathan S, Spiess J. 2017. Machine learning: an applied econometric approach. J. Econ. Perspect. 31:87–106
  2. N. B ̈auerle and A. Mundt. Dynamic mean-risk optimization in a binomial model. Mathematical Methods of Operations Research, 70(2):219–239, 2009.
  3. Friedman JH. 2002. Stochastic gradient boosting. Comput. Stat. Data Anal. 38:367–78
  4. Arjovsky M, Bottou L. 2017. Towards principled methods for training generative adversarial networks. arXiv:1701.04862 [stat.ML]
  5. Bessler, D. A. R. A. Babula, (1987), "Forecasting wheat exports: Do exchange rates matter?" Journal of Business and Economic Statistics, 5, 397–406.
  6. Kallus N. 2017. Balanced policy evaluation and learning. arXiv:1705.07384 [stat.ML]
  7. Alexander, J. C. Jr. (1995), "Refining the degree of earnings surprise: A comparison of statistical and analysts' forecasts," Financial Review, 30, 469–506.
Frequently Asked QuestionsQ: What is the prediction methodology for LON:POLR stock?
A: LON:POLR stock prediction methodology: We evaluate the prediction models Reinforcement Machine Learning (ML) and Stepwise Regression
Q: Is LON:POLR stock a buy or sell?
A: The dominant strategy among neural network is to Sell LON:POLR Stock.
Q: Is POLAR CAPITAL HOLDINGS PLC stock a good investment?
A: The consensus rating for POLAR CAPITAL HOLDINGS PLC is Sell and is assigned short-term B3 & long-term Baa2 estimated rating.
Q: What is the consensus rating of LON:POLR stock?
A: The consensus rating for LON:POLR is Sell.
Q: What is the prediction period for LON:POLR stock?
A: The prediction period for LON:POLR is 1 Year

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