Modelling A.I. in Economics

MMI Stock: A Risky Investment, But One with a lot of Potential

Outlook: Marcus & Millichap Inc. Common Stock is assigned short-term B2 & long-term B3 estimated rating.
AUC Score : What is AUC Score?
Short-Term Revised1 :
Dominant Strategy : Sell
Time series to forecast n: for Weeks2
Methodology : Modular Neural Network (Market Direction Analysis)
Hypothesis Testing : Lasso Regression
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

Marcus & Millichap Inc. Common Stock prediction model is evaluated with Modular Neural Network (Market Direction Analysis) and Lasso Regression1,2,3,4 and it is concluded that the MMI 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 3 Month period, the dominant strategy among neural network is: Sell

Graph 23

Key Points

  1. Modular Neural Network (Market Direction Analysis) for MMI stock price prediction process.
  2. Lasso Regression
  3. Can statistics predict the future?
  4. Market Outlook
  5. What is statistical models in machine learning?

MMI Stock Price Forecast

We consider Marcus & Millichap Inc. Common Stock Decision Process with Modular Neural Network (Market Direction Analysis) where A is the set of discrete actions of MMI 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: MMI Marcus & Millichap Inc. Common Stock
Time series to forecast: 3 Month

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


F(Lasso Regression)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):→ 3 Month R = 1 0 0 0 1 0 0 0 1

n:Time series to forecast

p:Price signals of MMI stock

j:Nash equilibria (Neural Network)

k:Dominated move of MMI stock holders

a:Best response for MMI 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 Lasso regression, also known as L1 regularization, is a type of regression analysis that adds a penalty to the least squares objective function in order to reduce the variance of the estimates and to induce sparsity in the model. This is done by adding a term to the objective function that is proportional to the sum of the absolute values of the coefficients. The penalty term is called the "lasso" penalty, and it is controlled by a parameter called the "lasso constant". Lasso regression can be used to address the problem of multicollinearity in linear regression, as well as the problem of overfitting. Multicollinearity occurs when two or more independent variables are highly correlated. This can cause the standard errors of the coefficients to be large, and it can also cause the coefficients to be unstable. Overfitting occurs when a model is too closely fit to the training data, and as a result, it does not generalize well to new data.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?

MMI 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 MMI Stock Prediction Model

  1. An entity shall apply this Standard for annual periods beginning on or after 1 January 2018. Earlier application is permitted. If an entity elects to apply this Standard early, it must disclose that fact and apply all of the requirements in this Standard at the same time (but see also paragraphs 7.1.2, 7.2.21 and 7.3.2). It shall also, at the same time, apply the amendments in Appendix C.
  2. An entity's risk management is the main source of information to perform the assessment of whether a hedging relationship meets the hedge effectiveness requirements. This means that the management information (or analysis) used for decision-making purposes can be used as a basis for assessing whether a hedging relationship meets the hedge effectiveness requirements.
  3. An entity shall apply this Standard for annual periods beginning on or after 1 January 2018. Earlier application is permitted. If an entity elects to apply this Standard early, it must disclose that fact and apply all of the requirements in this Standard at the same time (but see also paragraphs 7.1.2, 7.2.21 and 7.3.2). It shall also, at the same time, apply the amendments in Appendix C.
  4. 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.

MMI Marcus & Millichap Inc. Common Stock Financial Analysis*

Rating Short-Term Long-Term Senior
Outlook*B2B3
Income StatementBaa2Caa2
Balance SheetCCaa2
Leverage RatiosB3C
Cash FlowBaa2B1
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. B. Derfer, N. Goodyear, K. Hung, C. Matthews, G. Paoni, K. Rollins, R. Rose, M. Seaman, and J. Wiles. Online marketing platform, August 17 2007. US Patent App. 11/893,765
  2. Scholkopf B, Smola AJ. 2001. Learning with Kernels: Support Vector Machines, Regularization, Optimization, and Beyond. Cambridge, MA: MIT Press
  3. M. L. Littman. Friend-or-foe q-learning in general-sum games. In Proceedings of the Eighteenth International Conference on Machine Learning (ICML 2001), Williams College, Williamstown, MA, USA, June 28 - July 1, 2001, pages 322–328, 2001
  4. R. Rockafellar and S. Uryasev. Conditional value-at-risk for general loss distributions. Journal of Banking and Finance, 26(7):1443 – 1471, 2002
  5. Athey S, Bayati M, Imbens G, Zhaonan Q. 2019. Ensemble methods for causal effects in panel data settings. NBER Work. Pap. 25675
  6. Scholkopf B, Smola AJ. 2001. Learning with Kernels: Support Vector Machines, Regularization, Optimization, and Beyond. Cambridge, MA: MIT Press
  7. D. Bertsekas. Dynamic programming and optimal control. Athena Scientific, 1995.
Frequently Asked QuestionsQ: Is MMI stock expected to rise?
A: MMI stock prediction model is evaluated with Modular Neural Network (Market Direction Analysis) and Lasso Regression and it is concluded that dominant strategy for MMI stock is Sell
Q: Is MMI stock a buy or sell?
A: The dominant strategy among neural network is to Sell MMI Stock.
Q: Is Marcus & Millichap Inc. Common Stock stock a good investment?
A: The consensus rating for Marcus & Millichap Inc. Common Stock is Sell and is assigned short-term B2 & long-term B3 estimated rating.
Q: What is the consensus rating of MMI stock?
A: The consensus rating for MMI is Sell.
Q: What is the forecast for MMI stock?
A: MMI target price forecast: Sell

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