Modelling A.I. in Economics

IOAC Stock: Future is Bright, but not Without Challenges

Outlook: Innovative International Acquisition Corp. Class A Ordinary Shares is assigned short-term Caa2 & 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 : Statistical Inference (ML)
Hypothesis Testing : Spearman Correlation
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.


Summary

Innovative International Acquisition Corp. Class A Ordinary Shares prediction model is evaluated with Statistical Inference (ML) and Spearman Correlation1,2,3,4 and it is concluded that the IOAC stock is predictable in the short/long term. Statistical inference is a process of drawing conclusions about a population based on data from a sample of that population. In machine learning (ML), statistical inference is used to make predictions about new data based on data that has already been seen.5 According to price forecasts for 16 Weeks period, the dominant strategy among neural network is: Buy

Graph 47

Key Points

  1. Statistical Inference (ML) for IOAC stock price prediction process.
  2. Spearman Correlation
  3. What are the most successful trading algorithms?
  4. How can neural networks improve predictions?
  5. What statistical methods are used to analyze data?

IOAC Stock Price Forecast

We consider Innovative International Acquisition Corp. Class A Ordinary Shares Decision Process with Statistical Inference (ML) where A is the set of discrete actions of IOAC 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


Sample Set: Neural Network
Stock/Index: IOAC Innovative International Acquisition Corp. Class A Ordinary Shares
Time series to forecast: 16 Weeks

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


F(Spearman Correlation)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(Statistical Inference (ML)) X S(n):→ 16 Weeks e x rx

n:Time series to forecast

p:Price signals of IOAC stock

j:Nash equilibria (Neural Network)

k:Dominated move of IOAC stock holders

a:Best response for IOAC target price


Statistical inference is a process of drawing conclusions about a population based on data from a sample of that population. In machine learning (ML), statistical inference is used to make predictions about new data based on data that has already been seen.5 Spearman correlation is a nonparametric measure of the strength and direction of association between two variables. It is a rank-based correlation, which means that it does not assume that the data is normally distributed. Spearman correlation is calculated by first ranking the data for each variable, and then calculating the Pearson correlation between the ranks.6,7

 

For further technical information as per how our model work we invite you to visit the article below: 

How do PredictiveAI algorithms actually work?

IOAC Stock Forecast (Buy or Sell) Strategic Interaction Table

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 Statistical Inference (ML) based IOAC Stock Prediction Model

  1. One of the defining characteristics of a derivative is that it has an initial net investment that is smaller than would be required for other types of contracts that would be expected to have a similar response to changes in market factors. An option contract meets that definition because the premium is less than the investment that would be required to obtain the underlying financial instrument to which the option is linked. A currency swap that requires an initial exchange of different currencies of equal fair values meets the definition because it has a zero initial net investment.
  2. If the contractual cash flows on a financial asset have been renegotiated or otherwise modified, but the financial asset is not derecognised, that financial asset is not automatically considered to have lower credit risk. An entity shall assess whether there has been a significant increase in credit risk since initial recognition on the basis of all reasonable and supportable information that is available without undue cost or effort. This includes historical and forwardlooking information and an assessment of the credit risk over the expected life of the financial asset, which includes information about the circumstances that led to the modification. Evidence that the criteria for the recognition of lifetime expected credit losses are no longer met may include a history of up-to-date and timely payment performance against the modified contractual terms. Typically a customer would need to demonstrate consistently good payment behaviour over a period of time before the credit risk is considered to have decreased.
  3. 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.
  4. For a financial guarantee contract, the entity is required to make payments only in the event of a default by the debtor in accordance with the terms of the instrument that is guaranteed. Accordingly, cash shortfalls are the expected payments to reimburse the holder for a credit loss that it incurs less any amounts that the entity expects to receive from the holder, the debtor or any other party. If the asset is fully guaranteed, the estimation of cash shortfalls for a financial guarantee contract would be consistent with the estimations of cash shortfalls for the asset subject to the guarantee

*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.

IOAC Innovative International Acquisition Corp. Class A Ordinary Shares Financial Analysis*

Rating Short-Term Long-Term Senior
Outlook*Caa2B2
Income StatementCaa2C
Balance SheetB2Caa2
Leverage RatiosCaa2B2
Cash FlowCaa2Ba2
Rates of Return and ProfitabilityCaa2B1

*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. Canova, F. B. E. Hansen (1995), "Are seasonal patterns constant over time? A test for seasonal stability," Journal of Business and Economic Statistics, 13, 237–252.
  2. Christou, C., P. A. V. B. Swamy G. S. Tavlas (1996), "Modelling optimal strategies for the allocation of wealth in multicurrency investments," International Journal of Forecasting, 12, 483–493.
  3. Dimakopoulou M, Athey S, Imbens G. 2017. Estimation considerations in contextual bandits. arXiv:1711.07077 [stat.ML]
  4. A. Tamar and S. Mannor. Variance adjusted actor critic algorithms. arXiv preprint arXiv:1310.3697, 2013.
  5. Bewley, R. M. Yang (1998), "On the size and power of system tests for cointegration," Review of Economics and Statistics, 80, 675–679.
  6. M. J. Hausknecht and P. Stone. Deep recurrent Q-learning for partially observable MDPs. CoRR, abs/1507.06527, 2015
  7. Chow, G. C. (1960), "Tests of equality between sets of coefficients in two linear regressions," Econometrica, 28, 591–605.
Frequently Asked QuestionsQ: Is IOAC stock expected to rise?
A: IOAC stock prediction model is evaluated with Statistical Inference (ML) and Spearman Correlation and it is concluded that dominant strategy for IOAC stock is Buy
Q: Is IOAC stock a buy or sell?
A: The dominant strategy among neural network is to Buy IOAC Stock.
Q: Is Innovative International Acquisition Corp. Class A Ordinary Shares stock a good investment?
A: The consensus rating for Innovative International Acquisition Corp. Class A Ordinary Shares is Buy and is assigned short-term Caa2 & long-term B2 estimated rating.
Q: What is the consensus rating of IOAC stock?
A: The consensus rating for IOAC is Buy.
Q: What is the forecast for IOAC stock?
A: IOAC target price forecast: Buy

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