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Record W2306882258 · doi:10.1177/0971890715609846

Volatility Spillover in Foreign Exchange Markets

2015· article· en· W2306882258 on OpenAlexaboutno aff
Rajni Kant Rajhans, Anuradha Jain

Bibliographic record

VenueParadigm A Management Research Journal · 2015
Typearticle
Languageen
FieldEconomics, Econometrics and Finance
TopicMarket Dynamics and Volatility
Canadian institutionsnot available
Fundersnot available
KeywordsVolatility (finance)Spillover effectForeign exchangeMonetary economicsEconomicsForeign exchange marketFinancial economicsInternational economicsBusinessMacroeconomics

Abstract

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The recent financial crisis in the US and then the debt crisis in Europe have impacted the economical performance of the world in general, particularly the financial performance. With the increase in globalization and cross-border trade, the dependence of one economy on others increases. Portfolio diversification theory proposed by Markowitz, in 1952, suggests that if two markets are not significantly correlated, taking a position in that market helps in reducing the risk of the portfolio. The recent turmoil in these two markets (US and Europe) has affected the entire world and a lot of volatility has been observed in all financial markets around the world. Hence, it becomes imperative to identify the volatility spillover effect from one market to the other at this point. This article examines the volatility spillover of one market on other by taking five exchange rate markets: Great Britain pound (GBP), Euro (EUR), Canadian dollar (CAD) and Australian dollar (AUD) and Japanese yen (JPY) against the US dollar. Data from June 2008 to December 2012 were taken for consideration. Unit root test was used to identify the stationarity of data and the variance decomposition method was applied to identify the degree of influence of one market on other. The volatility spillover index, as suggested by Diebold and Yilmaz (2009), was created to identify the return spillover effect. Outcomes suggest that volatility on JPY and CAD follows the concept ‘better to give than receive’, while GBP as the net receiver goes along with the findings of Nikolaos (2012). A volatility spillover index of 11.11 per cent indicates low possibility of volatility transmission among considered currency pairs. This article will help traders, portfolio managers, policy makers and other market participants identify the source of volatility in considered currency markets and to take corrective 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)0.017
metaresearch head score (Gemma)0.000
Version: codex-gemma-dda1882f352aValidation status: machine_predicted_unvalidated
Candidate categoriesInsufficient payload (model declined to judge)
Consensus categoriesnone
DomainCandidate signal: none · Consensus signal: none
Study designCandidate signal: Observational · Consensus signal: none
GenreCandidate signal: Empirical · Consensus signal: none
Teacher disagreement score0.740
Threshold uncertainty score0.999

Codex and Gemma teacher scores by category

CategoryCodexGemma
Metaresearch0.0170.000
Meta-epidemiology (narrow)0.0000.000
Meta-epidemiology (broad)0.0000.000
Bibliometrics0.0010.001
Science and technology studies0.0000.000
Scholarly communication0.0000.001
Open science0.0010.000
Research integrity0.0000.001
Insufficient payload (model declined to judge)0.0020.000

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 head0.142
GPT teacher head0.332
Teacher spread0.189 · 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 teacher head, not a consensus.

Study designObservational
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

Citations2
Published2015
Admission routes1
Has abstractyes

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