Modelling A.I. in Economics

SSTI Stock: The Next Bubble?

Outlook: SoundThinking Inc. Common Stock is assigned short-term Ba2 & long-term B1 estimated rating.
AUC Score : What is AUC Score?
Short-Term Revised1 :
Dominant Strategy : Speculative Trend
Time series to forecast n: for Weeks2
Methodology : Supervised Machine Learning (ML)
Hypothesis Testing : Spearman 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

SoundThinking Inc. Common Stock prediction model is evaluated with Supervised Machine Learning (ML) and Spearman Correlation1,2,3,4 and it is concluded that the SSTI stock is predictable in the short/long term. Supervised machine learning (ML) is a type of machine learning where a model is trained on labeled data. This means that the data has been tagged with the correct output for the input data. The model learns to predict the output for new input data based on the labeled data. Supervised ML is a powerful tool that can be used for a variety of tasks, including classification, regression, and forecasting. Classification tasks involve predicting the category of an input data, such as whether an email is spam or not. Regression tasks involve predicting a numerical value for an input data, such as the price of a house. Forecasting tasks involve predicting future values for a time series, such as the sales of a product.5 According to price forecasts for 1 Year period, the dominant strategy among neural network is: Speculative Trend

Graph 40

Key Points

  1. Supervised Machine Learning (ML) for SSTI stock price prediction process.
  2. Spearman Correlation
  3. Fundemental Analysis with Algorithmic Trading
  4. Can neural networks predict stock market?
  5. What is the use of Markov decision process?

SSTI Stock Price Forecast

We consider SoundThinking Inc. Common Stock Decision Process with Supervised Machine Learning (ML) where A is the set of discrete actions of SSTI 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: SSTI SoundThinking Inc. Common Stock
Time series to forecast: 1 Year

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


F(Spearman 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(Supervised Machine Learning (ML)) X S(n):→ 1 Year i = 1 n s i

n:Time series to forecast

p:Price signals of SSTI stock

j:Nash equilibria (Neural Network)

k:Dominated move of SSTI stock holders

a:Best response for SSTI target price


Supervised machine learning (ML) is a type of machine learning where a model is trained on labeled data. This means that the data has been tagged with the correct output for the input data. The model learns to predict the output for new input data based on the labeled data. Supervised ML is a powerful tool that can be used for a variety of tasks, including classification, regression, and forecasting. Classification tasks involve predicting the category of an input data, such as whether an email is spam or not. Regression tasks involve predicting a numerical value for an input data, such as the price of a house. Forecasting tasks involve predicting future values for a time series, such as the sales of a product.5 Spearman correlation is a nonparametric measure of the strength and direction of association between two variables. It is a rank-based correlation, which means that it does not assume that the data is normally distributed. Spearman correlation is calculated by first ranking the data for each variable, and then calculating the Pearson correlation between the ranks.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?

SSTI 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 Supervised Machine Learning (ML) based SSTI Stock Prediction Model

  1. 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.
  2. The significance of a change in the credit risk since initial recognition depends on the risk of a default occurring as at initial recognition. Thus, a given change, in absolute terms, in the risk of a default occurring will be more significant for a financial instrument with a lower initial risk of a default occurring compared to a financial instrument with a higher initial risk of a default occurring.
  3. When identifying what risk components qualify for designation as a hedged item, an entity assesses such risk components within the context of the particular market structure to which the risk or risks relate and in which the hedging activity takes place. Such a determination requires an evaluation of the relevant facts and circumstances, which differ by risk and market.
  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.

SSTI SoundThinking Inc. Common Stock Financial Analysis*

Rating Short-Term Long-Term Senior
Outlook*Ba2B1
Income StatementBaa2Baa2
Balance SheetBaa2B2
Leverage RatiosB3Caa2
Cash FlowBaa2C
Rates of Return and ProfitabilityB3B1

*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. Jorgenson, D.W., Weitzman, M.L., ZXhang, Y.X., Haxo, Y.M. and Mat, Y.X., 2023. Can Neural Networks Predict Stock Market?. AC Investment Research Journal, 220(44).
  2. Matzkin RL. 2007. Nonparametric identification. In Handbook of Econometrics, Vol. 6B, ed. J Heckman, E Learner, pp. 5307–68. Amsterdam: Elsevier
  3. Byron, R. P. O. Ashenfelter (1995), "Predicting the quality of an unborn grange," Economic Record, 71, 40–53.
  4. C. Szepesvári. Algorithms for Reinforcement Learning. Synthesis Lectures on Artificial Intelligence and Machine Learning. Morgan & Claypool Publishers, 2010
  5. Arjovsky M, Bottou L. 2017. Towards principled methods for training generative adversarial networks. arXiv:1701.04862 [stat.ML]
  6. R. Sutton and A. Barto. Introduction to reinforcement learning. MIT Press, 1998
  7. J. Harb and D. Precup. Investigating recurrence and eligibility traces in deep Q-networks. In Deep Reinforcement Learning Workshop, NIPS 2016, Barcelona, Spain, 2016.
Frequently Asked QuestionsQ: Is SSTI stock expected to rise?
A: SSTI stock prediction model is evaluated with Supervised Machine Learning (ML) and Spearman Correlation and it is concluded that dominant strategy for SSTI stock is Speculative Trend
Q: Is SSTI stock a buy or sell?
A: The dominant strategy among neural network is to Speculative Trend SSTI Stock.
Q: Is SoundThinking Inc. Common Stock stock a good investment?
A: The consensus rating for SoundThinking Inc. Common Stock is Speculative Trend and is assigned short-term Ba2 & long-term B1 estimated rating.
Q: What is the consensus rating of SSTI stock?
A: The consensus rating for SSTI is Speculative Trend.
Q: What is the forecast for SSTI stock?
A: SSTI target price forecast: Speculative Trend

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