Modelling A.I. in Economics

RUN Stock: A Bubble Waiting to Burst (Forecast)

Outlook: Sunrun Inc. Common Stock is assigned short-term Ba3 & long-term B1 estimated rating.
AUC Score : What is AUC Score?
Short-Term Revised1 :
Dominant Strategy : Speculative Trend
Time series to forecast n: for Weeks2
Methodology : Modular Neural Network (Market Direction Analysis)
Hypothesis Testing : Statistical Hypothesis Testing
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

Sunrun Inc. Common Stock prediction model is evaluated with Modular Neural Network (Market Direction Analysis) and Statistical Hypothesis Testing1,2,3,4 and it is concluded that the RUN stock is predictable in the short/long term. Modular neural networks (MNNs) are a type of artificial neural network that can be used for market direction analysis. MNNs are made up of multiple smaller neural networks, called modules. Each module is responsible for learning a specific task, such as identifying patterns in data or predicting future price movements. The modules are then combined to form a single neural network that can perform multiple tasks.In the context of market direction analysis, MNNs can be used to identify patterns in market data that suggest that the market is likely to move in a particular direction. This information can then be used to make predictions about future price movements.5 According to price forecasts for 16 Weeks period, the dominant strategy among neural network is: Speculative Trend

Graph 3

Key Points

  1. Modular Neural Network (Market Direction Analysis) for RUN stock price prediction process.
  2. Statistical Hypothesis Testing
  3. What is the best way to predict stock prices?
  4. What is Markov decision process in reinforcement learning?
  5. Can we predict stock market using machine learning?

RUN Stock Price Forecast

We consider Sunrun Inc. Common Stock Decision Process with Modular Neural Network (Market Direction Analysis) where A is the set of discrete actions of RUN 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: RUN Sunrun Inc. Common Stock
Time series to forecast: 16 Weeks

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


F(Statistical Hypothesis Testing)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(Modular Neural Network (Market Direction Analysis)) X S(n):→ 16 Weeks R = 1 0 0 0 1 0 0 0 1

n:Time series to forecast

p:Price signals of RUN stock

j:Nash equilibria (Neural Network)

k:Dominated move of RUN stock holders

a:Best response for RUN target price


Modular neural networks (MNNs) are a type of artificial neural network that can be used for market direction analysis. MNNs are made up of multiple smaller neural networks, called modules. Each module is responsible for learning a specific task, such as identifying patterns in data or predicting future price movements. The modules are then combined to form a single neural network that can perform multiple tasks.In the context of market direction analysis, MNNs can be used to identify patterns in market data that suggest that the market is likely to move in a particular direction. This information can then be used to make predictions about future price movements.5 Statistical hypothesis testing is a process used to determine whether there is enough evidence to support a claim about a population based on a sample. The process involves making two hypotheses, a null hypothesis and an alternative hypothesis, and then collecting data and using statistical tests to determine which hypothesis is more likely to be true. The null hypothesis is the statement that there is no difference between the population and the sample. The alternative hypothesis is the statement that there is a difference between the population and the sample. The statistical test is used to calculate a p-value, which is the probability of obtaining the observed data or more extreme data if the null hypothesis is true. A p-value of less than 0.05 is typically considered to be statistically significant, which means that there is less than a 5% chance of obtaining the observed data or more extreme data if the null hypothesis is true.6,7

 

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

How do Predictive A.I. algorithms actually work?

RUN 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 Modular Neural Network (Market Direction Analysis) based RUN Stock Prediction Model

  1. Changes in market conditions that give rise to market risk include changes in a benchmark interest rate, the price of another entity's financial instrument, a commodity price, a foreign exchange rate or an index of prices or rates.
  2. Interest Rate Benchmark Reform, which amended IFRS 9, IAS 39 and IFRS 7, issued in September 2019, added Section 6.8 and amended paragraph 7.2.26. An entity shall apply these amendments for annual periods beginning on or after 1 January 2020. Earlier application is permitted. If an entity applies these amendments for an earlier period, it shall disclose that fact.
  3. The underlying pool must contain one or more instruments that have contractual cash flows that are solely payments of principal and interest on the principal amount outstanding
  4. An entity shall apply this Standard retrospectively, in accordance with IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors, except as specified in paragraphs 7.2.4–7.2.26 and 7.2.28. This Standard shall not be applied to items that have already been derecognised at the date of initial application.

*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.

RUN Sunrun Inc. Common Stock Financial Analysis*

Rating Short-Term Long-Term Senior
Outlook*Ba3B1
Income StatementBa2Ba2
Balance SheetBaa2B3
Leverage RatiosB1C
Cash FlowBaa2Baa2
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. Jorgenson, D.W., Weitzman, M.L., ZXhang, Y.X., Haxo, Y.M. and Mat, Y.X., 2023. Can Neural Networks Predict Stock Market?. AC Investment Research Journal, 220(44).
  2. K. Boda and J. Filar. Time consistent dynamic risk measures. Mathematical Methods of Operations Research, 63(1):169–186, 2006
  3. Mazumder R, Hastie T, Tibshirani R. 2010. Spectral regularization algorithms for learning large incomplete matrices. J. Mach. Learn. Res. 11:2287–322
  4. Barkan O. 2016. Bayesian neural word embedding. arXiv:1603.06571 [math.ST]
  5. Jorgenson, D.W., Weitzman, M.L., ZXhang, Y.X., Haxo, Y.M. and Mat, Y.X., 2023. Apple's Stock Price: How News Affects Volatility. AC Investment Research Journal, 220(44).
  6. Breiman L. 2001b. Statistical modeling: the two cultures (with comments and a rejoinder by the author). Stat. Sci. 16:199–231
  7. 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).
Frequently Asked QuestionsQ: Is RUN stock expected to rise?
A: RUN stock prediction model is evaluated with Modular Neural Network (Market Direction Analysis) and Statistical Hypothesis Testing and it is concluded that dominant strategy for RUN stock is Speculative Trend
Q: Is RUN stock a buy or sell?
A: The dominant strategy among neural network is to Speculative Trend RUN Stock.
Q: Is Sunrun Inc. Common Stock stock a good investment?
A: The consensus rating for Sunrun Inc. Common Stock is Speculative Trend and is assigned short-term Ba3 & long-term B1 estimated rating.
Q: What is the consensus rating of RUN stock?
A: The consensus rating for RUN is Speculative Trend.
Q: What is the forecast for RUN stock?
A: RUN target price forecast: Speculative Trend

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