Modelling A.I. in Economics

DESP Stock: A Bubble Waiting to Burst

Outlook: Despegar.com Corp. Ordinary Shares is assigned short-term Caa2 & long-term B1 estimated rating.
AUC Score : What is AUC Score?
Short-Term Revised1 :
Dominant Strategy : Sell
Time series to forecast n: for Weeks2
Methodology : Statistical Inference (ML)
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

Despegar.com Corp. Ordinary Shares prediction model is evaluated with Statistical Inference (ML) and Statistical Hypothesis Testing1,2,3,4 and it is concluded that the DESP 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: Sell

Graph 39

Key Points

  1. Statistical Inference (ML) for DESP stock price prediction process.
  2. Statistical Hypothesis Testing
  3. Why do we need predictive models?
  4. Understanding Buy, Sell, and Hold Ratings
  5. What are main components of Markov decision process?

DESP Stock Price Forecast

We consider Despegar.com Corp. Ordinary Shares Decision Process with Statistical Inference (ML) where A is the set of discrete actions of DESP 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: DESP Despegar.com Corp. Ordinary Shares
Time series to forecast: 16 Weeks

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


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(Statistical Inference (ML)) X S(n):→ 16 Weeks R = r 1 r 2 r 3

n:Time series to forecast

p:Price signals of DESP stock

j:Nash equilibria (Neural Network)

k:Dominated move of DESP stock holders

a:Best response for DESP 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 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 PredictiveAI algorithms actually work?

DESP 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 DESP Stock Prediction Model

  1. An entity shall assess whether contractual cash flows are solely payments of principal and interest on the principal amount outstanding for the currency in which the financial asset is denominated.
  2. If subsequently an entity reasonably expects that the alternative benchmark rate will not be separately identifiable within 24 months from the date the entity designated it as a non-contractually specified risk component for the first time, the entity shall cease applying the requirement in paragraph 6.9.11 to that alternative benchmark rate and discontinue hedge accounting prospectively from the date of that reassessment for all hedging relationships in which the alternative benchmark rate was designated as a noncontractually specified risk component.
  3. An entity need not undertake an exhaustive search for information but shall consider all reasonable and supportable information that is available without undue cost or effort and that is relevant to the estimate of expected credit losses, including the effect of expected prepayments. The information used shall include factors that are specific to the borrower, general economic conditions and an assessment of both the current as well as the forecast direction of conditions at the reporting date. An entity may use various sources of data, that may be both internal (entity-specific) and external. Possible data sources include internal historical credit loss experience, internal ratings, credit loss experience of other entities and external ratings, reports and statistics. Entities that have no, or insufficient, sources of entityspecific data may use peer group experience for the comparable financial instrument (or groups of financial instruments).
  4. Paragraph 5.5.4 requires that lifetime expected credit losses are recognised on all financial instruments for which there has been significant increases in credit risk since initial recognition. In order to meet this objective, if an entity is not able to group financial instruments for which the credit risk is considered to have increased significantly since initial recognition based on shared credit risk characteristics, the entity should recognise lifetime expected credit losses on a portion of the financial assets for which credit risk is deemed to have increased significantly. The aggregation of financial instruments to assess whether there are changes in credit risk on a collective basis may change over time as new information becomes available on groups of, or individual, financial instruments.

*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.

DESP Despegar.com Corp. Ordinary Shares Financial Analysis*

Rating Short-Term Long-Term Senior
Outlook*Caa2B1
Income StatementCaa2B3
Balance SheetCC
Leverage RatiosCBaa2
Cash FlowBa3Ba3
Rates of Return and ProfitabilityCB2

*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. Zeileis A, Hothorn T, Hornik K. 2008. Model-based recursive partitioning. J. Comput. Graph. Stat. 17:492–514 Zhou Z, Athey S, Wager S. 2018. Offline multi-action policy learning: generalization and optimization. arXiv:1810.04778 [stat.ML]
  2. Athey S, Bayati M, Imbens G, Zhaonan Q. 2019. Ensemble methods for causal effects in panel data settings. NBER Work. Pap. 25675
  3. V. Borkar. An actor-critic algorithm for constrained Markov decision processes. Systems & Control Letters, 54(3):207–213, 2005.
  4. Rumelhart DE, Hinton GE, Williams RJ. 1986. Learning representations by back-propagating errors. Nature 323:533–36
  5. 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).
  6. Tibshirani R. 1996. Regression shrinkage and selection via the lasso. J. R. Stat. Soc. B 58:267–88
  7. Ashley, R. (1983), "On the usefulness of macroeconomic forecasts as inputs to forecasting models," Journal of Forecasting, 2, 211–223.
Frequently Asked QuestionsQ: Is DESP stock expected to rise?
A: DESP stock prediction model is evaluated with Statistical Inference (ML) and Statistical Hypothesis Testing and it is concluded that dominant strategy for DESP stock is Sell
Q: Is DESP stock a buy or sell?
A: The dominant strategy among neural network is to Sell DESP Stock.
Q: Is Despegar.com Corp. Ordinary Shares stock a good investment?
A: The consensus rating for Despegar.com Corp. Ordinary Shares is Sell and is assigned short-term Caa2 & long-term B1 estimated rating.
Q: What is the consensus rating of DESP stock?
A: The consensus rating for DESP is Sell.
Q: What is the forecast for DESP stock?
A: DESP target price forecast: Sell

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