TSM Stock: Future Looks Bright; Should You Buy the Stock?

Jorgenson, Dale W.; Weitzman, Martin L.; ZXhang, Yoshua X; Haxo, Yann M; Mat , Ying X

Outlook: Taiwan Semiconductor Manufacturing Company Ltd. is assigned short-term B2 & 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 : Ensemble Learning (ML)
Hypothesis Testing : Pearson 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

Taiwan Semiconductor Manufacturing Company Ltd. prediction model is evaluated with Ensemble Learning (ML) and Pearson Correlation^1,2,3,4 and it is concluded that the TSM stock is predictable in the short/long term. Ensemble learning is a machine learning (ML) technique that combines multiple models to create a single model that is more accurate than any of the individual models. This is done by combining the predictions of the individual models, typically using a voting scheme or a weighted average.⁵ According to price forecasts for 16 Weeks period, the dominant strategy among neural network is: Buy

Key Points

Ensemble Learning (ML) for TSM stock price prediction process.
Pearson Correlation
Technical Analysis with Algorithmic Trading
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Stock Forecast Based On a Predictive Algorithm

TSM Stock Price Forecast

We consider Taiwan Semiconductor Manufacturing Company Ltd. Decision Process with Ensemble Learning (ML) where A is the set of discrete actions of TSM 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: TSM Taiwan Semiconductor Manufacturing Company Ltd.
Time series to forecast: 16 Weeks

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

F(Pearson Correlation)^6,7=

\begin{matrix} p_{a 1} & p_{a 2} & \dots & p_{1 n} \\ ⋮ \\ p_{j 1} & p_{j 2} & \dots & p_{j n} \\ ⋮ \\ p_{k 1} & p_{k 2} & \dots & p_{k n} \\ ⋮ \\ p_{n 1} & p_{n 2} & \dots & p_{n n} \end{matrix}

X R(Ensemble Learning (ML)) X S(n):→ 16 Weeks

\sum_{i = 1}^{n} (r_{i})

n:Time series to forecast

p:Price signals of TSM stock

j:Nash equilibria (Neural Network)

k:Dominated move of TSM stock holders

a:Best response for TSM target price

Ensemble learning is a machine learning (ML) technique that combines multiple models to create a single model that is more accurate than any of the individual models. This is done by combining the predictions of the individual models, typically using a voting scheme or a weighted average.⁵ Pearson correlation, also known as Pearson's product-moment correlation, is a measure of the linear relationship between two variables. It is a statistical measure that assesses the strength and direction of a linear relationship between two variables. The sign of the correlation coefficient indicates the direction of the relationship, while the magnitude of the correlation coefficient indicates the strength of the relationship. A correlation coefficient of 0.9 indicates a strong positive correlation, while a correlation coefficient of 0.2 indicates a weak positive correlation.^6,7

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TSM 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 Ensemble Learning (ML) based TSM Stock Prediction Model

Compared to a business model whose objective is to hold financial assets to collect contractual cash flows, this business model will typically involve greater frequency and value of sales. This is because selling financial assets is integral to achieving the business model's objective instead of being only incidental to it. However, there is no threshold for the frequency or value of sales that must occur in this business model because both collecting contractual cash flows and selling financial assets are integral to achieving its objective.
An entity shall apply Prepayment Features with Negative Compensation (Amendments to IFRS 9) retrospectively in accordance with IAS 8, except as specified in paragraphs 7.2.30–7.2.34
The risk of a default occurring on financial instruments that have comparable credit risk is higher the longer the expected life of the instrument; for example, the risk of a default occurring on an AAA-rated bond with an expected life of 10 years is higher than that on an AAA-rated bond with an expected life of five years.
IFRS 17, issued in May 2017, amended paragraphs 2.1, B2.1, B2.4, B2.5 and B4.1.30, and added paragraph 3.3.5. Amendments to IFRS 17, issued in June 2020, further amended paragraph 2.1 and added paragraphs 7.2.36‒7.2.42. An entity shall apply those amendments when it applies IFRS 17.

*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.

TSM Taiwan Semiconductor Manufacturing Company Ltd. Financial Analysis*

Rating	Short-Term	Long-Term Senior
Outlook*	B2	B2
Income Statement	Baa2	Caa2
Balance Sheet	C	C
Leverage Ratios	Ba2	C
Cash Flow	Caa2	Baa2
Rates of Return and Profitability	B2	B2

*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

Jorgenson, D.W., Weitzman, M.L., ZXhang, Y.X., Haxo, Y.M. and Mat, Y.X., 2023. S&P 500: Is the Bull Market Ready to Run Out of Steam?. AC Investment Research Journal, 220(44).
M. Ono, M. Pavone, Y. Kuwata, and J. Balaram. Chance-constrained dynamic programming with application to risk-aware robotic space exploration. Autonomous Robots, 39(4):555–571, 2015
Bessler, D. A. S. W. Fuller (1993), "Cointegration between U.S. wheat markets," Journal of Regional Science, 33, 481–501.
Alexander, J. C. Jr. (1995), "Refining the degree of earnings surprise: A comparison of statistical and analysts' forecasts," Financial Review, 30, 469–506.
Bessler, D. A. S. W. Fuller (1993), "Cointegration between U.S. wheat markets," Journal of Regional Science, 33, 481–501.
K. Boda, J. Filar, Y. Lin, and L. Spanjers. Stochastic target hitting time and the problem of early retirement. Automatic Control, IEEE Transactions on, 49(3):409–419, 2004
Sutton RS, Barto AG. 1998. Reinforcement Learning: An Introduction. Cambridge, MA: MIT Press

Frequently Asked Questions

Q: Is TSM stock expected to rise?
A: TSM stock prediction model is evaluated with Ensemble Learning (ML) and Pearson Correlation and it is concluded that dominant strategy for TSM stock is Buy
Q: Is TSM stock a buy or sell?
A: The dominant strategy among neural network is to Buy TSM Stock.
Q: Is Taiwan Semiconductor Manufacturing Company Ltd. stock a good investment?
A: The consensus rating for Taiwan Semiconductor Manufacturing Company Ltd. is Buy and is assigned short-term B2 & long-term B2 estimated rating.
Q: What is the consensus rating of TSM stock?
A: The consensus rating for TSM is Buy.
Q: What is the forecast for TSM stock?
A: TSM target price forecast: Buy

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