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Record W1485827958

A Threshold Stochastic Volatility Model with Realized Volatility

2010· preprint· en· W1485827958 on OpenAlexaff
Dinghai Xu

Bibliographic record

VenueRePEc: Research Papers in Economics · 2010
Typepreprint
Languageen
FieldEconomics, Econometrics and Finance
TopicFinancial Risk and Volatility Modeling
Canadian institutionsUniversity of Waterloo
Fundersnot available
KeywordsStochastic volatilityVolatility (finance)EconometricsThreshold limit valueMonte Carlo methodForward volatilityImplied volatilityRealized varianceBayesian probabilityThreshold modelComputer scienceMathematicsStatistics
DOInot available

Abstract

fetched live from OpenAlex

Rapid development in the computer technology has made the financial transaction data visible at an ultimate limit level. The realized volatility, as a proxy for the "true" volatility, can be constructed using the high frequency data. This paper extends a threshold stochastic volatility specification proposed in So, Li and Lam (2002) by incorporating the high frequency volatility measures. Due to the availability of the volatility time series, the parameters estimation can be easily implemented via the standard maximum likelihood estimation (MLE) rather than using the simulated Bayesian methods. In the Monte Carlo section, several mis-specification and sensitivity experiments are conducted. The proposed methodology shows good performance according to the Monte Carlo results. In the empirical study, three stock indices are examined under the threshold stochastic volatility structure. Empirical results show that in different regimes, the returns and volatilities exhibit asymmetric behavior. In addition, this paper allows the threshold in the model to be flexible and uses a sequential optimization based on MLE to search for the "optimal" threshold value. We find that the model with a flexible threshold is always preferred to the model with a fixed threshold according to the log-likelihood measure. Interestingly, the "optimal" threshold is found to be stable across different sampling realized volatility measures.

Fetched live from OpenAlex and de-inverted. Abstracts are not stored in this database: the inverted indexes are 8.6 GB of the frame’s 9.3 GB of text, and the host has 13 GB free.

How this classification was reachedexpand

Full frame machine prediction

Teacher imitation

Not calibrated prevalence, not ground truth. Human validation pending. The Gemma side is a direct model label for every work in the frame, read from the title-only record. The Codex side is a classifier learned from the 10,348 direct Codex labels and calibrated to design-weighted sample rates; fields without enough sample support carry no Codex call. Candidate is the union of the two sides; consensus is their intersection. These outputs are machine_predicted_unvalidated and are not human labels.

metaresearch head score (Codex)0.002
metaresearch head score (Gemma)0.006
Version: metacan-v3-hybrid-931329e0061cValidation status: machine_predicted_unvalidated
Candidate categoriesnone
Consensus categoriesnone
DomainCandidate signal: none · Consensus signal: none
Study designCandidate signal: Simulation or modeling · Consensus signal: Simulation or modeling
GenreCandidate signal: Empirical · Consensus signal: none
Teacher disagreement score0.008
Threshold uncertainty score0.016

Distilled classifier scores by category (both heads)

CategoryCodexGemma
Metaresearch0.0020.006
Meta-epidemiology (narrow)0.0010.001
Meta-epidemiology (broad)0.0020.002
Bibliometrics0.0010.001
Science and technology studies0.0010.002
Scholarly communication0.0030.003
Open science0.0030.002
Research integrity0.0020.002
Insufficient payload (model declined to judge)0.0040.001

Machine scores (provisional)

The two teacher heads of the student model, read on this work. A score orders the frame for review; it never asserts a category, and the validation status ships verbatim with every row.

Baseline scores from an immature model (maturity gate not passed, 7 training rounds). Scores rank; they never assert a category.

Opus teacher head0.065
GPT teacher head0.302
Teacher spread0.237 · how far apart the two teachers sit on this one work
Validation statusscore_only:v0-immature-baseline · verbatim from the scoring run: score_only means the number may rank works, and no category label ships from it

Classification

machine, unvalidated

Machine predicted; a candidate call from one source (direct Gemma or distilled Codex), not a consensus.

The models applied no category: nothing in the taxonomy fit this work.
Study designSimulation or modeling
Domainnot available
GenreEmpirical

How this classification was reached, model by model and score by score, is at the end of the page under "How this classification was reached".

Quick stats

Citations4
Published2010
Admission routes1
Has abstractyes

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