Modelling A.I. in Economics

NCTY Stock: Future is Bright, but not Without Challenges (Forecast)

Outlook: The9 Limited American Depository Shares is assigned short-term B2 & long-term B1 estimated rating.
AUC Score : What is AUC Score?
Short-Term Revised1 :
Dominant Strategy : Buy
Time series to forecast n: for Weeks2
Methodology : Reinforcement Machine Learning (ML)
Hypothesis Testing : Independent T-Test
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

The9 Limited American Depository Shares prediction model is evaluated with Reinforcement Machine Learning (ML) and Independent T-Test1,2,3,4 and it is concluded that the NCTY stock is predictable in the short/long term. Reinforcement machine learning (RL) is a type of machine learning where an agent learns to take actions in an environment in order to maximize a reward. The agent does this by trial and error, and is able to learn from its mistakes. RL is a powerful tool that can be used for a variety of tasks, including game playing, robotics, and finance.5 According to price forecasts for 16 Weeks period, the dominant strategy among neural network is: Buy

Graph 25

Key Points

  1. Reinforcement Machine Learning (ML) for NCTY stock price prediction process.
  2. Independent T-Test
  3. Reaction Function
  4. How accurate is machine learning in stock market?
  5. Market Risk

NCTY Stock Price Forecast

We consider The9 Limited American Depository Shares Decision Process with Reinforcement Machine Learning (ML) where A is the set of discrete actions of NCTY 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: NCTY The9 Limited American Depository Shares
Time series to forecast: 16 Weeks

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


F(Independent T-Test)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(Reinforcement Machine Learning (ML)) X S(n):→ 16 Weeks R = 1 0 0 0 1 0 0 0 1

n:Time series to forecast

p:Price signals of NCTY stock

j:Nash equilibria (Neural Network)

k:Dominated move of NCTY stock holders

a:Best response for NCTY target price


Reinforcement machine learning (RL) is a type of machine learning where an agent learns to take actions in an environment in order to maximize a reward. The agent does this by trial and error, and is able to learn from its mistakes. RL is a powerful tool that can be used for a variety of tasks, including game playing, robotics, and finance.5 An independent t-test is a statistical test that compares the means of two independent samples. In an independent t-test, the data points in each sample are not related to each other. The independent t-test is a parametric test, which means that it assumes that the data is normally distributed. The independent t-test is also a two-sample test, which means that it compares the means of two independent samples.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?

NCTY 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 Reinforcement Machine Learning (ML) based NCTY Stock Prediction Model

  1. Time value of money is the element of interest that provides consideration for only the passage of time. That is, the time value of money element does not provide consideration for other risks or costs associated with holding the financial asset. In order to assess whether the element provides consideration for only the passage of time, an entity applies judgement and considers relevant factors such as the currency in which the financial asset is denominated and the period for which the interest rate is set.
  2. Interest Rate Benchmark Reform—Phase 2, which amended IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16, issued in August 2020, added paragraphs 5.4.5–5.4.9, 6.8.13, Section 6.9 and paragraphs 7.2.43–7.2.46. An entity shall apply these amendments for annual periods beginning on or after 1 January 2021. Earlier application is permitted. If an entity applies these amendments for an earlier period, it shall disclose that fact.
  3. Expected credit losses are a probability-weighted estimate of credit losses (ie the present value of all cash shortfalls) over the expected life of the financial instrument. A cash shortfall is the difference between the cash flows that are due to an entity in accordance with the contract and the cash flows that the entity expects to receive. Because expected credit losses consider the amount and timing of payments, a credit loss arises even if the entity expects to be paid in full but later than when contractually due.
  4. However, in some cases, the time value of money element may be modified (ie imperfect). That would be the case, for example, if a financial asset's interest rate is periodically reset but the frequency of that reset does not match the tenor of the interest rate (for example, the interest rate resets every month to a one-year rate) or if a financial asset's interest rate is periodically reset to an average of particular short- and long-term interest rates. In such cases, an entity must assess the modification to determine whether the contractual cash flows represent solely payments of principal and interest on the principal amount outstanding. In some circumstances, the entity may be able to make that determination by performing a qualitative assessment of the time value of money element whereas, in other circumstances, it may be necessary to perform a quantitative assessment.

*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.

NCTY The9 Limited American Depository Shares Financial Analysis*

Rating Short-Term Long-Term Senior
Outlook*B2B1
Income StatementCaa2Baa2
Balance SheetB1B3
Leverage RatiosCaa2Caa2
Cash FlowCaa2B3
Rates of Return and ProfitabilityBaa2Ba3

*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. Chernozhukov V, Demirer M, Duflo E, Fernandez-Val I. 2018b. Generic machine learning inference on heteroge- nous treatment effects in randomized experiments. NBER Work. Pap. 24678
  2. J. Filar, D. Krass, and K. Ross. Percentile performance criteria for limiting average Markov decision pro- cesses. IEEE Transaction of Automatic Control, 40(1):2–10, 1995.
  3. Y. Le Tallec. Robust, risk-sensitive, and data-driven control of Markov decision processes. PhD thesis, Massachusetts Institute of Technology, 2007.
  4. Athey S, Wager S. 2017. Efficient policy learning. arXiv:1702.02896 [math.ST]
  5. Abadie A, Imbens GW. 2011. Bias-corrected matching estimators for average treatment effects. J. Bus. Econ. Stat. 29:1–11
  6. Kallus N. 2017. Balanced policy evaluation and learning. arXiv:1705.07384 [stat.ML]
  7. Athey S, Imbens G, Wager S. 2016a. Efficient inference of average treatment effects in high dimensions via approximate residual balancing. arXiv:1604.07125 [math.ST]
Frequently Asked QuestionsQ: Is NCTY stock expected to rise?
A: NCTY stock prediction model is evaluated with Reinforcement Machine Learning (ML) and Independent T-Test and it is concluded that dominant strategy for NCTY stock is Buy
Q: Is NCTY stock a buy or sell?
A: The dominant strategy among neural network is to Buy NCTY Stock.
Q: Is The9 Limited American Depository Shares stock a good investment?
A: The consensus rating for The9 Limited American Depository Shares is Buy and is assigned short-term B2 & long-term B1 estimated rating.
Q: What is the consensus rating of NCTY stock?
A: The consensus rating for NCTY is Buy.
Q: What is the forecast for NCTY stock?
A: NCTY target price forecast: Buy

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