Modelling A.I. in Economics

VLRS Stock Forecast: A Sell For The Next 3 Month (Forecast)

Outlook: Controladora Vuela Compania de Aviacion S.A.B. de C.V. American Depositary Shares each representing ten (10) Ordinary Participation Certificates is assigned short-term B3 & long-term B2 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 (CNN Layer)
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

Controladora Vuela Compania de Aviacion S.A.B. de C.V. American Depositary Shares each representing ten (10) Ordinary Participation Certificates prediction model is evaluated with Modular Neural Network (CNN Layer) and Lasso Regression1,2,3,4 and it is concluded that the VLRS stock is predictable in the short/long term. CNN layers are a powerful tool for extracting features from images. They are able to learn to detect patterns in images that are not easily detected by humans. This makes them well-suited for a variety of MNN applications.5 According to price forecasts for 3 Month period, the dominant strategy among neural network is: Sell

Graph 39

Key Points

  1. Modular Neural Network (CNN Layer) for VLRS stock price prediction process.
  2. Lasso Regression
  3. Can we predict stock market using machine learning?
  4. Can statistics predict the future?
  5. Stock Forecast Based On a Predictive Algorithm

VLRS Stock Price Forecast

We consider Controladora Vuela Compania de Aviacion S.A.B. de C.V. American Depositary Shares each representing ten (10) Ordinary Participation Certificates Decision Process with Modular Neural Network (CNN Layer) where A is the set of discrete actions of VLRS 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: VLRS Controladora Vuela Compania de Aviacion S.A.B. de C.V. American Depositary Shares each representing ten (10) Ordinary Participation Certificates
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 (CNN Layer)) X S(n):→ 3 Month r s rs

n:Time series to forecast

p:Price signals of VLRS stock

j:Nash equilibria (Neural Network)

k:Dominated move of VLRS stock holders

a:Best response for VLRS target price


CNN layers are a powerful tool for extracting features from images. They are able to learn to detect patterns in images that are not easily detected by humans. This makes them well-suited for a variety of MNN applications.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

 

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How do PredictiveAI algorithms actually work?

VLRS 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 (CNN Layer) based VLRS Stock Prediction Model

  1. For the purposes of applying the requirements in paragraphs 5.7.7 and 5.7.8, an accounting mismatch is not caused solely by the measurement method that an entity uses to determine the effects of changes in a liability's credit risk. An accounting mismatch in profit or loss would arise only when the effects of changes in the liability's credit risk (as defined in IFRS 7) are expected to be offset by changes in the fair value of another financial instrument. A mismatch that arises solely as a result of the measurement method (ie because an entity does not isolate changes in a liability's credit risk from some other changes in its fair value) does not affect the determination required by paragraphs 5.7.7 and 5.7.8. For example, an entity may not isolate changes in a liability's credit risk from changes in liquidity risk. If the entity presents the combined effect of both factors in other comprehensive income, a mismatch may occur because changes in liquidity risk may be included in the fair value measurement of the entity's financial assets and the entire fair value change of those assets is presented in profit or loss. However, such a mismatch is caused by measurement imprecision, not the offsetting relationship described in paragraph B5.7.6 and, therefore, does not affect the determination required by paragraphs 5.7.7 and 5.7.8.
  2. A portfolio of financial assets that is managed and whose performance is evaluated on a fair value basis (as described in paragraph 4.2.2(b)) is neither held to collect contractual cash flows nor held both to collect contractual cash flows and to sell financial assets. The entity is primarily focused on fair value information and uses that information to assess the assets' performance and to make decisions. In addition, a portfolio of financial assets that meets the definition of held for trading is not held to collect contractual cash flows or held both to collect contractual cash flows and to sell financial assets. For such portfolios, the collection of contractual cash flows is only incidental to achieving the business model's objective. Consequently, such portfolios of financial assets must be measured at fair value through profit or loss.
  3. 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.
  4. An entity has not retained control of a transferred asset if the transferee has the practical ability to sell the transferred asset. An entity has retained control of a transferred asset if the transferee does not have the practical ability to sell the transferred asset. A transferee has the practical ability to sell the transferred asset if it is traded in an active market because the transferee could repurchase the transferred asset in the market if it needs to return the asset to the entity. For example, a transferee may have the practical ability to sell a transferred asset if the transferred asset is subject to an option that allows the entity to repurchase it, but the transferee can readily obtain the transferred asset in the market if the option is exercised. A transferee does not have the practical ability to sell the transferred asset if the entity retains such an option and the transferee cannot readily obtain the transferred asset in the market if the entity exercises its option

*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.

VLRS Controladora Vuela Compania de Aviacion S.A.B. de C.V. American Depositary Shares each representing ten (10) Ordinary Participation Certificates Financial Analysis*

Rating Short-Term Long-Term Senior
Outlook*B3B2
Income StatementCC
Balance SheetB2C
Leverage RatiosB1Baa2
Cash FlowB1Baa2
Rates of Return and ProfitabilityCaa2C

*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. Clements, M. P. D. F. Hendry (1995), "Forecasting in cointegrated systems," Journal of Applied Econometrics, 10, 127–146.
  2. Hastie T, Tibshirani R, Friedman J. 2009. The Elements of Statistical Learning. Berlin: Springer
  3. Allen, P. G. (1994), "Economic forecasting in agriculture," International Journal of Forecasting, 10, 81–135.
  4. Thompson WR. 1933. On the likelihood that one unknown probability exceeds another in view of the evidence of two samples. Biometrika 25:285–94
  5. Athey S, Imbens GW. 2017a. The econometrics of randomized experiments. In Handbook of Economic Field Experiments, Vol. 1, ed. E Duflo, A Banerjee, pp. 73–140. Amsterdam: Elsevier
  6. S. Bhatnagar, H. Prasad, and L. Prashanth. Stochastic recursive algorithms for optimization, volume 434. Springer, 2013
  7. Tibshirani R. 1996. Regression shrinkage and selection via the lasso. J. R. Stat. Soc. B 58:267–88
Frequently Asked QuestionsQ: Is VLRS stock expected to rise?
A: VLRS stock prediction model is evaluated with Modular Neural Network (CNN Layer) and Lasso Regression and it is concluded that dominant strategy for VLRS stock is Sell
Q: Is VLRS stock a buy or sell?
A: The dominant strategy among neural network is to Sell VLRS Stock.
Q: Is Controladora Vuela Compania de Aviacion S.A.B. de C.V. American Depositary Shares each representing ten (10) Ordinary Participation Certificates stock a good investment?
A: The consensus rating for Controladora Vuela Compania de Aviacion S.A.B. de C.V. American Depositary Shares each representing ten (10) Ordinary Participation Certificates is Sell and is assigned short-term B3 & long-term B2 estimated rating.
Q: What is the consensus rating of VLRS stock?
A: The consensus rating for VLRS is Sell.
Q: What is the forecast for VLRS stock?
A: VLRS target price forecast: Sell

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