MétaCan
Menu
Back to cohort

Building Local Correlation Models for Analytical Pricing

2023· preprint· en· W4367040474 on OpenAlexaff
Marcos Escobar‐Anel

Bibliographic record

VenuePreprints.org · 2023
Typepreprint
Languageen
FieldEconomics, Econometrics and Finance
TopicComplex Systems and Time Series Analysis
Canadian institutionsWestern University
Fundersnot available
KeywordsGeometric Brownian motionEconometricsBrownian motionStochastic gameSimple (philosophy)Multivariate statisticsAsset (computer security)CorrelationStock (firearms)Derivative (finance)Capital asset pricing modelMathematical economicsEconomicsComputer scienceMathematical optimizationMathematicsFinancial economicsApplied mathematicsDiffusion processStatisticsEngineeringEconomy

Abstract

fetched live from OpenAlex

This short paper reveals a simple methodology to create local-correlation models suitable for the
 closed-form pricing of multi-asset financial derivatives. The multivariate models are built to ensure
 two conditions, first, marginals follow desirable processes, e.g. we choose the Geometric Brownian
 Motion (GBM), popular for stock prices. Second, the payoff of the derivative should follow a desired
 one dimensional process. These conditions lead to a specific choice of the dependence structure, in
 the form of a local-correlation model. Two popular multi-asset options are entertained, a spread
 option and a basket option.

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)0.001
metaresearch head score (Gemma)0.000
Version: codex-gemma-dda1882f352aValidation status: machine_predicted_unvalidated
Candidate categoriesMeta-epidemiology (narrow), Insufficient payload (model declined to judge)
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 score0.850
Threshold uncertainty score1.000

Codex and Gemma teacher scores by category

CategoryCodexGemma
Metaresearch0.0010.000
Meta-epidemiology (narrow)0.0000.000
Meta-epidemiology (broad)0.0010.001
Bibliometrics0.0010.000
Science and technology studies0.0000.000
Scholarly communication0.0000.000
Open science0.0010.001
Research integrity0.0000.001
Insufficient payload (model declined to judge)0.0010.002

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 head0.254
GPT teacher head0.332
Teacher spread0.078 · 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 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

Citations0
Published2023
Admission routes1
Has abstractyes

Explore more

Same venuePreprints.orgSame topicComplex Systems and Time Series AnalysisFrench-language works237,207