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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 pro-posed 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 ex-amined under the threshold stochastic volatility structure. Empirical results show that in different regimes, the returns and volatilities exhibit asymmet-ric 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 thresh-old 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 distilled prediction

Teacher imitation

Not calibrated prevalence, not ground truth. Human validation pending. Learned from the 10,348 direct Codex labels and 10,348 direct Gemma labels. Candidate is the union of thresholded teacher heads; consensus is their intersection. These outputs are machine_predicted_unvalidated and are not human labels or direct frontier model labels.

metaresearch head score (Codex)0.005
metaresearch head score (Gemma)0.001
Version: codex-gemma-dda1882f352aValidation status: machine_predicted_unvalidated
Candidate categoriesMeta-epidemiology (narrow), Research integrity
Consensus categoriesResearch integrity
DomainCandidate signal: none · Consensus signal: none
Study designCandidate signal: Simulation or modeling · Consensus signal: Simulation or modeling
GenreCandidate signal: Empirical · Consensus signal: Empirical
Teacher disagreement score0.174
Threshold uncertainty score1.000

Codex and Gemma teacher scores by category

CategoryCodexGemma
Metaresearch0.0050.001
Meta-epidemiology (narrow)0.0010.001
Meta-epidemiology (broad)0.0020.000
Bibliometrics0.0010.000
Science and technology studies0.0000.001
Scholarly communication0.0000.000
Open science0.0010.001
Research integrity0.0010.006
Insufficient payload (model declined to judge)0.0000.000

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; both teacher heads agree on what is shown here.

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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