Youdao Inc. American Depositary Shares each representing one Class A Ordinary Share is assigned short-term B1 & long-term B2 estimated rating.

Outlook: Youdao Inc. American Depositary Shares each representing one Class A Ordinary Share is assigned short-term B1 & long-term B2 estimated rating.
Dominant Strategy : Hold
Time series to forecast n: 22 Jun 2023 for 8 Weeks
Methodology : Supervised Machine Learning (ML)

Abstract

Youdao Inc. American Depositary Shares each representing one Class A Ordinary Share prediction model is evaluated with Supervised Machine Learning (ML) and Ridge Regression^1,2,3,4 and it is concluded that the DAO 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. According to price forecasts for 8 Weeks period, the dominant strategy among neural network is: Hold

Key Points

1. Can machine learning predict?
2. Is it better to buy and sell or hold?
3. Probability Distribution

DAO Target Price Prediction Modeling Methodology

We consider Youdao Inc. American Depositary Shares each representing one Class A Ordinary Share Decision Process with Supervised Machine Learning (ML) where A is the set of discrete actions of DAO 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

F(Ridge Regression)^5,6,7= $\begin{array}{cccc}{p}_{\mathrm{a}1}& p_{\mathrm{a}2}& \dots & p_{1n}\\ & ⋮\\ p_{j1}& p_{j2}& \dots & p_{jn}\\ & ⋮\\ p_{k1}& p_{k2}& \dots & p_{kn}\\ & ⋮\\ p_{n1}& p_{n2}& \dots & p_{nn}\end{array}$ X R(Supervised Machine Learning (ML)) X S(n):→ 8 Weeks $\overrightarrow{S}=\left(s_1,s_2,s_3\right)$

n:Time series to forecast

p:Price signals of DAO stock

j:Nash equilibria (Neural Network)

k:Dominated move

a:Best response for target price

Supervised Machine Learning (ML)

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.

Ridge Regression

Ridge regression 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. This is done by adding a term to the objective function that is proportional to the sum of the squares of the coefficients. The penalty term is called the "ridge" penalty, and it is controlled by a parameter called the "ridge constant". Ridge regression can be used to address the problem of multicollinearity in linear regression. 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. Ridge regression can help to reduce the standard errors of the coefficients and to make the coefficients more stable.

 

For further technical information as per how our model work we invite you to visit the article below: 

How do AC Investment Research machine learning (predictive) algorithms actually work?

DAO Stock Forecast (Buy or Sell) for 8 Weeks

Sample Set: Neural Network
Stock/Index: DAO Youdao Inc. American Depositary Shares each representing one Class A Ordinary Share
Time series to forecast n: 22 Jun 2023 for 8 Weeks

According to price forecasts for 8 Weeks period, the dominant strategy among neural network is: Hold

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%

IFRS Reconciliation Adjustments for Youdao Inc. American Depositary Shares each representing one Class A Ordinary Share

1. If an entity originates a loan that bears an off-market interest rate (eg 5 per cent when the market rate for similar loans is 8 per cent), and receives an upfront fee as compensation, the entity recognises the loan at its fair value, ie net of the fee it receives.
2. A net position is eligible for hedge accounting only if an entity hedges on a net basis for risk management purposes. Whether an entity hedges in this way is a matter of fact (not merely of assertion or documentation). Hence, an entity cannot apply hedge accounting on a net basis solely to achieve a particular accounting outcome if that would not reflect its risk management approach. Net position hedging must form part of an established risk management strategy. Normally this would be approved by key management personnel as defined in IAS 24.
3. All investments in equity instruments and contracts on those instruments must be measured at fair value. However, in limited circumstances, cost may be an appropriate estimate of fair value. That may be the case if insufficient more recent information is available to measure fair value, or if there is a wide range of possible fair value measurements and cost represents the best estimate of fair value within that range.
4. For example, Entity A, whose functional currency is its local currency, has a firm commitment to pay FC150,000 for advertising expenses in nine months' time and a firm commitment to sell finished goods for FC150,000 in 15 months' time. Entity A enters into a foreign currency derivative that settles in nine months' time under which it receives FC100 and pays CU70. Entity A has no other exposures to FC. Entity A does not manage foreign currency risk on a net basis. Hence, Entity A cannot apply hedge accounting for a hedging relationship between the foreign currency derivative and a net position of FC100 (consisting of FC150,000 of the firm purchase commitment—ie advertising services—and FC149,900 (of the FC150,000) of the firm sale commitment) for a nine-month period.

*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.

Conclusions

Youdao Inc. American Depositary Shares each representing one Class A Ordinary Share is assigned short-term B1 & long-term B2 estimated rating. Youdao Inc. American Depositary Shares each representing one Class A Ordinary Share prediction model is evaluated with Supervised Machine Learning (ML) and Ridge Regression^1,2,3,4 and it is concluded that the DAO stock is predictable in the short/long term. According to price forecasts for 8 Weeks period, the dominant strategy among neural network is: Hold

DAO Youdao Inc. American Depositary Shares each representing one Class A Ordinary Share Financial Analysis*

Rating	Short-Term	Long-Term Senior
Outlook*	B1	B2
Income Statement	B2	B3
Balance Sheet	Caa2	B1
Leverage Ratios	B3	Ba2
Cash Flow	B1	B2
Rates of Return and Profitability	Baa2	C

*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?

Prediction Confidence Score

Trust metric by Neural Network: 74 out of 100 with 770 signals.

References

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2. M. L. Littman. Markov games as a framework for multi-agent reinforcement learning. In Ma- chine Learning, Proceedings of the Eleventh International Conference, Rutgers University, New Brunswick, NJ, USA, July 10-13, 1994, pages 157–163, 1994
3. Clements, M. P. D. F. Hendry (1995), "Forecasting in cointegrated systems," Journal of Applied Econometrics, 10, 127–146.
4. Chen, C. L. Liu (1993), "Joint estimation of model parameters and outlier effects in time series," Journal of the American Statistical Association, 88, 284–297.
5. Nie X, Wager S. 2019. Quasi-oracle estimation of heterogeneous treatment effects. arXiv:1712.04912 [stat.ML]
6. P. Artzner, F. Delbaen, J. Eber, and D. Heath. Coherent measures of risk. Journal of Mathematical Finance, 9(3):203–228, 1999
7. Abadir, K. M., K. Hadri E. Tzavalis (1999), "The influence of VAR dimensions on estimator biases," Econometrica, 67, 163–181.

Frequently Asked Questions

Q: What is the prediction methodology for DAO stock?
A: DAO stock prediction methodology: We evaluate the prediction models Supervised Machine Learning (ML) and Ridge Regression
Q: Is DAO stock a buy or sell?
A: The dominant strategy among neural network is to Hold DAO Stock.
Q: Is Youdao Inc. American Depositary Shares each representing one Class A Ordinary Share stock a good investment?
A: The consensus rating for Youdao Inc. American Depositary Shares each representing one Class A Ordinary Share is Hold and is assigned short-term B1 & long-term B2 estimated rating.
Q: What is the consensus rating of DAO stock?
A: The consensus rating for DAO is Hold.
Q: What is the prediction period for DAO stock?
A: The prediction period for DAO is 8 Weeks