Executive Summary

In this forecast evaluation report, we examine the performance of the Facebook stock forecast generated by the I Know First AI Algorithm for the FB stock with time horizons ranging from 3 days to 3 months, which were delivered daily to our clients. Our analysis covers the time period from 1 January 2019 to 9 July 2019. Below, we present our key takeaways for checking hit ratios of our FB predictions in the stock market.

Highlights:

• 95% Hit Ratio for 3-months time period for Facebook stock forecast allowing our clients to be able to invest their money with significant less risk
• Predictions consistently hit above 58% accuracy despite volatile market conditions

Note that the above results were obtained as a result of an evaluation conducted over the specific time period to give a presentation for the FB movements. The following report provides an extensive explanation of our methodology and detailed analysis of the performance metrics that we obtained during the evaluation. This report is a new I Know First evaluation series illustrating the ability to provide successful forecasting on FB.

About the I Know First Algorithm

The I Know First self-learning algorithm analyses, models, and provides stock market predictions for the capital markets, including stocks, bonds, currencies, commodities and interest rates. The algorithm is based on Artificial Intelligence (AI) and Machine Learning (ML) and incorporates elements of Artificial Neural Networks and Genetic Algorithms.

The system outputs the predicted trend as a number, positive or negative, along with a wave chart that predicts how the waves will overlap with the predicted trend. Consequently, the trader can decide which direction to trade, when to enter the trade, and when to exit the trade. The model is 100% empirical, based only on factual data, thereby avoiding any biases or emotions that may accompany human assumptions. I Know First’s model only involves the human factor in building the mathematical framework and providing the initial set of inputs and outputs to the system. The algorithm produces a forecast with a signal and a predictability indicator. The signal is the number in the middle of the box. The predictability is the number at the bottom of the box. At the top, a specific asset is identified. This format is consistent across all predictions.

Our algorithm provides two independent indicators for the index – signal and predictability.

The signal is the predicted strength and direction of movement of the index. This is measured from –inf to +inf.

The predictability indicates our confidence in the signal. The predictability is a Pearson correlation coefficient relating to past algorithmic performance and actual market movement, measured from -1 to 1. You can find a detailed description of our heatmap here

The Hit Ratio Calculation

The hit ratio helps us to identify the accuracy of our algorithm’s predictions.

We predict the direction of movement of FB using our algorithm. Our predictions are then compared against actual movements of FB within the same time horizon.

The hit ratio is then calculated as follows:  

Stock in Spotlight: Facebook Stock Forecast

Facebook, Inc. is an American online social media and social networking service company based in Menlo Park, California. It was founded by Mark Zuckerberg, along with fellow Harvard College students and roommates Eduardo Saverin, Andrew McCollum, Dustin Moskovitz and Chris Hughes. It is considered one of the Big Four technology companies along with Amazon, Apple, and Google. FB is listed on the NASDAQ.

Facebook Stock Price Movements

From 1 January 2019 to 9 July 2019, Facebook stock price has fluctuated. Despite a general uptrend over past 7 months, there were times when the stock fell in price during the months of April to May. It is imperative for traders to spot such changes in prices to profit during volatile times in the stock market. 

Evaluating Facebook Stock Forecast Hit Ratio

Through the results above, you can see that we at I Know First have developed an algorithm that can consistently predict FB stock movements throughout various time periods. On average through 2019, I Know First has achieved the incredible feat of hitting the FB’s exact movement 95% of the times for the 3-months prediction time horizon. This, in essence, means that the algorithm will be correct almost all the time on the 3-months time horizon allowing our clients to make the safest investments. Additionally, to that, we can also predict the 3-day time horizon, 7-day time horizon, 14-day time horizon and one-month time horizon at 58%, 59%, 64% and 81% accuracy respectively. This allows our investors to have a safer outlook when investing despite these quick and volatile time periods.

Conclusion

All in all, we at I Know First have a mission to provide our clients with the most robust and reliable stock market forecasts. By sharpening our ability to predict the FB using our artificial intelligence system, we provide our clients with increasing certainty that their investment will be safer and more profitable. Within the bounds of certainty, we have consistently been able to find that we can predict the FB movements above 58% of the time over the last half year. The peak of that is the 95% hit ratio over the 3-months time horizon  our predictions for the FB stock price movement are correct almost all the time on average for long term investments.