Modelling A.I. in Economics

Is KMB Stock Expected to Go Up?

Outlook: Kimberly-Clark Corporation Common Stock is assigned short-term B1 & 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 : Multi-Instance 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

Kimberly-Clark Corporation Common Stock prediction model is evaluated with Multi-Instance Learning (ML) and Pearson Correlation1,2,3,4 and it is concluded that the KMB stock is predictable in the short/long term. Multi-instance learning (MIL) is a machine learning (ML) problem where a dataset consists of multiple instances, and each instance is associated with a single label. The goal of MIL is to learn a model that can predict the label of a new instance based on the labels of the instances that it is similar to. MIL is a challenging problem because the instances in a dataset are not labeled individually. This means that the model cannot simply learn a mapping from the features of an instance to its label. Instead, the model must learn a way to combine the features of multiple instances to predict the label of a new instance.5 According to price forecasts for 4 Weeks period, the dominant strategy among neural network is: Sell

Graph 11

Key Points

  1. Multi-Instance Learning (ML) for KMB stock price prediction process.
  2. Pearson Correlation
  3. What is the best way to predict stock prices?
  4. What is the best way to predict stock prices?
  5. What are main components of Markov decision process?

KMB Stock Price Forecast

We consider Kimberly-Clark Corporation Common Stock Decision Process with Multi-Instance Learning (ML) where A is the set of discrete actions of KMB 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: KMB Kimberly-Clark Corporation Common Stock
Time series to forecast: 4 Weeks

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


F(Pearson 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(Multi-Instance Learning (ML)) X S(n):→ 4 Weeks R = 1 0 0 0 1 0 0 0 1

n:Time series to forecast

p:Price signals of KMB stock

j:Nash equilibria (Neural Network)

k:Dominated move of KMB stock holders

a:Best response for KMB target price


Multi-instance learning (MIL) is a machine learning (ML) problem where a dataset consists of multiple instances, and each instance is associated with a single label. The goal of MIL is to learn a model that can predict the label of a new instance based on the labels of the instances that it is similar to. MIL is a challenging problem because the instances in a dataset are not labeled individually. This means that the model cannot simply learn a mapping from the features of an instance to its label. Instead, the model must learn a way to combine the features of multiple instances to predict the label of a new instance.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

 

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

How do PredictiveAI algorithms actually work?

KMB 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 Multi-Instance Learning (ML) based KMB Stock Prediction Model

  1. Paragraph 4.1.1(a) requires an entity to classify financial assets on the basis of the entity's business model for managing the financial assets, unless paragraph 4.1.5 applies. An entity assesses whether its financial assets meet the condition in paragraph 4.1.2(a) or the condition in paragraph 4.1.2A(a) on the basis of the business model as determined by the entity's key management personnel (as defined in IAS 24 Related Party Disclosures).
  2. The definition of a derivative refers to non-financial variables that are not specific to a party to the contract. These include an index of earthquake losses in a particular region and an index of temperatures in a particular city. Non-financial variables specific to a party to the contract include the occurrence or non-occurrence of a fire that damages or destroys an asset of a party to the contract. A change in the fair value of a non-financial asset is specific to the owner if the fair value reflects not only changes in market prices for such assets (a financial variable) but also the condition of the specific non-financial asset held (a non-financial variable). For example, if a guarantee of the residual value of a specific car exposes the guarantor to the risk of changes in the car's physical condition, the change in that residual value is specific to the owner of the car.
  3. 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.
  4. 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.

*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.

KMB Kimberly-Clark Corporation Common Stock Financial Analysis*

Rating Short-Term Long-Term Senior
Outlook*B1B1
Income StatementCaa2Baa2
Balance SheetB2C
Leverage RatiosBa2Caa2
Cash FlowBaa2C
Rates of Return and ProfitabilityCaa2Baa2

*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. Mnih A, Kavukcuoglu K. 2013. Learning word embeddings efficiently with noise-contrastive estimation. In Advances in Neural Information Processing Systems, Vol. 26, ed. Z Ghahramani, M Welling, C Cortes, ND Lawrence, KQ Weinberger, pp. 2265–73. San Diego, CA: Neural Inf. Process. Syst. Found.
  2. J. Harb and D. Precup. Investigating recurrence and eligibility traces in deep Q-networks. In Deep Reinforcement Learning Workshop, NIPS 2016, Barcelona, Spain, 2016.
  3. Knox SW. 2018. Machine Learning: A Concise Introduction. Hoboken, NJ: Wiley
  4. S. Bhatnagar, H. Prasad, and L. Prashanth. Stochastic recursive algorithms for optimization, volume 434. Springer, 2013
  5. Imbens GW, Rubin DB. 2015. Causal Inference in Statistics, Social, and Biomedical Sciences. Cambridge, UK: Cambridge Univ. Press
  6. Breusch, T. S. (1978), "Testing for autocorrelation in dynamic linear models," Australian Economic Papers, 17, 334–355.
  7. Belsley, D. A. (1988), "Modelling and forecast reliability," International Journal of Forecasting, 4, 427–447.
Frequently Asked QuestionsQ: Is KMB stock expected to rise?
A: KMB stock prediction model is evaluated with Multi-Instance Learning (ML) and Pearson Correlation and it is concluded that dominant strategy for KMB stock is Sell
Q: Is KMB stock a buy or sell?
A: The dominant strategy among neural network is to Sell KMB Stock.
Q: Is Kimberly-Clark Corporation Common Stock stock a good investment?
A: The consensus rating for Kimberly-Clark Corporation Common Stock is Sell and is assigned short-term B1 & long-term B1 estimated rating.
Q: What is the consensus rating of KMB stock?
A: The consensus rating for KMB is Sell.
Q: What is the forecast for KMB stock?
A: KMB target price forecast: Sell

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