stochastic volatility models
Stochastic volatility models are mathematical models used in finance and economics to understand and predict the volatility (i.e., the measure of price variability) of financial assets. They incorporate randomness and variability in the volatility itself, acknowledging that the volatility of an asset can change over time. This provides a more realistic representation of financial markets and helps in making more accurate predictions and risk assessments.
Requires login.
Related Concepts (2)
Similar Concepts
- nonlinear stochastic models
- stochastic calculus
- stochastic control theory
- stochastic differential equations
- stochastic dynamical systems
- stochastic dynamics
- stochastic modelling
- stochastic models
- stochastic networks
- stochastic optimization
- stochastic prediction
- stochastic process
- stochastic processes in finance
- stochastic weather models
- volatility modeling