Modelling A.I. in Economics

PNM Stock: The Stock Market Bubble Is About to Burst

Outlook: PNM Resources Inc. (Holding Co.) Common Stock is assigned short-term Ba3 & long-term B1 estimated rating.
AUC Score : What is AUC Score?
Short-Term Revised1 :
Dominant Strategy : HoldBuy
Time series to forecast n: for Weeks2
Methodology : Statistical Inference (ML)
Hypothesis Testing : Wilcoxon Sign-Rank 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

PNM Resources Inc. (Holding Co.) Common Stock prediction model is evaluated with Statistical Inference (ML) and Wilcoxon Sign-Rank Test1,2,3,4 and it is concluded that the PNM 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 8 Weeks period, the dominant strategy among neural network is: HoldBuy

Graph 18

Key Points

  1. Statistical Inference (ML) for PNM stock price prediction process.
  2. Wilcoxon Sign-Rank Test
  3. Fundemental Analysis with Algorithmic Trading
  4. Can stock prices be predicted?
  5. How useful are statistical predictions?

PNM Stock Price Forecast

We consider PNM Resources Inc. (Holding Co.) Common Stock Decision Process with Statistical Inference (ML) where A is the set of discrete actions of PNM 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: PNM PNM Resources Inc. (Holding Co.) Common Stock
Time series to forecast: 8 Weeks

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


F(Wilcoxon Sign-Rank 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(Statistical Inference (ML)) X S(n):→ 8 Weeks i = 1 n s i

n:Time series to forecast

p:Price signals of PNM stock

j:Nash equilibria (Neural Network)

k:Dominated move of PNM stock holders

a:Best response for PNM 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 The Wilcoxon rank-sum test, also known as the Mann-Whitney U test, is a non-parametric test that is used to compare the medians of two independent samples. It is a rank-based test, which means that it does not assume that the data is normally distributed. The Wilcoxon rank-sum test is calculated by first ranking the data from both samples, and then finding the sum of the ranks for one of the samples. The Wilcoxon rank-sum test statistic is then calculated by subtracting the sum of the ranks for one sample from the sum of the ranks for the other sample. The p-value for the Wilcoxon rank-sum test is calculated using a table of critical values. The p-value is the probability of obtaining a test statistic at least as extreme as the one observed, assuming that the null hypothesis is true.6,7

 

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How do PredictiveAI algorithms actually work?

PNM 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 PNM Stock Prediction Model

  1. For example, an entity may use this condition to designate financial liabilities as at fair value through profit or loss if it meets the principle in paragraph 4.2.2(b) and the entity has financial assets and financial liabilities that share one or more risks and those risks are managed and evaluated on a fair value basis in accordance with a documented policy of asset and liability management. An example could be an entity that has issued 'structured products' containing multiple embedded derivatives and manages the resulting risks on a fair value basis using a mix of derivative and non-derivative financial instruments
  2. Fluctuation around a constant hedge ratio (and hence the related hedge ineffectiveness) cannot be reduced by adjusting the hedge ratio in response to each particular outcome. Hence, in such circumstances, the change in the extent of offset is a matter of measuring and recognising hedge ineffectiveness but does not require rebalancing.
  3. If a put option written by an entity prevents a transferred asset from being derecognised and the entity measures the transferred asset at fair value, the associated liability is measured at the option exercise price plus the time value of the option. The measurement of the asset at fair value is limited to the lower of the fair value and the option exercise price because the entity has no right to increases in the fair value of the transferred asset above the exercise price of the option. This ensures that the net carrying amount of the asset and the associated liability is the fair value of the put option obligation. For example, if the fair value of the underlying asset is CU120, the option exercise price is CU100 and the time value of the option is CU5, the carrying amount of the associated liability is CU105 (CU100 + CU5) and the carrying amount of the asset is CU100 (in this case the option exercise price).
  4. Expected credit losses reflect an entity's own expectations of credit losses. However, when considering all reasonable and supportable information that is available without undue cost or effort in estimating expected credit losses, an entity should also consider observable market information about the credit risk of the particular financial instrument or similar 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.

PNM PNM Resources Inc. (Holding Co.) Common Stock Financial Analysis*

Rating Short-Term Long-Term Senior
Outlook*Ba3B1
Income StatementBaa2Ba3
Balance SheetB1Baa2
Leverage RatiosBaa2C
Cash FlowB3B3
Rates of Return and ProfitabilityB3B3

*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. Varian HR. 2014. Big data: new tricks for econometrics. J. Econ. Perspect. 28:3–28
  2. Knox SW. 2018. Machine Learning: A Concise Introduction. Hoboken, NJ: Wiley
  3. Alexander, J. C. Jr. (1995), "Refining the degree of earnings surprise: A comparison of statistical and analysts' forecasts," Financial Review, 30, 469–506.
  4. Imbens GW, Lemieux T. 2008. Regression discontinuity designs: a guide to practice. J. Econom. 142:615–35
  5. Dudik M, Erhan D, Langford J, Li L. 2014. Doubly robust policy evaluation and optimization. Stat. Sci. 29:485–511
  6. Mnih A, Teh YW. 2012. A fast and simple algorithm for training neural probabilistic language models. In Proceedings of the 29th International Conference on Machine Learning, pp. 419–26. La Jolla, CA: Int. Mach. Learn. Soc.
  7. Athey S, Bayati M, Doudchenko N, Imbens G, Khosravi K. 2017a. Matrix completion methods for causal panel data models. arXiv:1710.10251 [math.ST]
Frequently Asked QuestionsQ: Is PNM stock expected to rise?
A: PNM stock prediction model is evaluated with Statistical Inference (ML) and Wilcoxon Sign-Rank Test and it is concluded that dominant strategy for PNM stock is HoldBuy
Q: Is PNM stock a buy or sell?
A: The dominant strategy among neural network is to HoldBuy PNM Stock.
Q: Is PNM Resources Inc. (Holding Co.) Common Stock stock a good investment?
A: The consensus rating for PNM Resources Inc. (Holding Co.) Common Stock is HoldBuy and is assigned short-term Ba3 & long-term B1 estimated rating.
Q: What is the consensus rating of PNM stock?
A: The consensus rating for PNM is HoldBuy.
Q: What is the forecast for PNM stock?
A: PNM target price forecast: HoldBuy

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