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Quantitative Finance : Recent Questions and Answers (Page 16)

Find answers to your questions about Quantitative Finance or help others by answering their Quantitative Finance questions.

Creating daily rebalancing stock portfolios based on analyst recommendations

I am doing research on analyst recommendations on Finnish stock market, using Can Investors Profit from the Prophets? Security Analyst Recommendations and Stock Returns by Barber etc. as reference paper....

Asked on 11/26/2020 by Mr Sandwich

0 answer

How can the increments of a CIR process be derived?

For a CIR process, which has SDE$$dr_t = alpha (mu - r_t) dt + sigma sqrt{r_t} dW_t$$how can I derive the increments over the discrete...

Asked on 11/19/2020 by John Smith

1 answer

Market Impact proportional to the bid-ask spread

Empirical studies have shown that market impact can be linked to the following parameters: $$ mathcal{I}(Q) = kappa . sigma ...

Asked on 11/12/2020 by mbz0

1 answer

Where can I get some Inflation Option example quotes (year-on-year and zero-coupon)

I am writing an academic paper on calibration of inflation vanilla options. I need to generate examples for the paper. Is there anywhere I can get example data for the...

Asked on 10/21/2020 by Kiann

1 answer

Is there a good backtesting package in R?

My model exports a vector that have for each day b-buy s-sell or h- holdit's look like this:sig [1] b b s s b b b s...

Asked on 10/17/2020 by alonch7

3 answer

How to deal with missing stock returns?

If I want to calculate the Covariance between two stocks but there are missing days in both, how can I deal with missing data? I want to use Pairwise deletion...

Asked on 10/14/2020 by johnCena12345678

1 answer

What is the logic of the eigenvectors of the Johanson cointegration test determining hedge ratios?

Reading Algorithmic Trading: Winning Strategies and Their Rationale, Ernie Chan and there is a short section about the Johanson test for cointegration where it is mentioned that...

Asked on 10/09/2020 by lampShadesDrifter

1 answer

On Girsanov Theorem to switch from Risk-Neutral to Stock Numeraire

Summary: long-story cut short, the question is asking for what types of functions $f(.)$, the Cameron-Martin-Girsanov theorem can be used as follows: $$ mathbb{E}^{mathbb{P}^2}[f(W_t)]=mathbb{E}^{mathbb{P}^1}left[frac{dmathbb{P}^2}{dmathbb{P}^1}f(W_t)right] $$ Long story: the...

Asked on 09/27/2020 by Jan Stuller

1 answer

Market Maker option's pricing with reference spot

When a option's market maker receives a quote from a broker, usually the underlying spot prices is locked with a reference. Let's suppose the following example: Broker: "Buy 10k call...

Asked on 09/18/2020 by DUM03

1 answer

FX Carry Trade and how to calculate it

I am trying to calculate the FX carry on let's say USDILS for a task. I was given the 3M Forward Implied Yield (ILSI3M CMPN Curncy on Bloomberg) and I...

Asked on 09/12/2020 by ZGZ

0 answer

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