Change search
CiteExportLink to record
Permanent link

Direct link
Cite
Citation style
  • apa
  • ieee
  • modern-language-association-8th-edition
  • vancouver
  • Other style
More styles
Language
  • de-DE
  • en-GB
  • en-US
  • fi-FI
  • nn-NO
  • nn-NB
  • sv-SE
  • Other locale
More languages
Output format
  • html
  • text
  • asciidoc
  • rtf
Change point detection in an Ornstein-Uhlenbeck process (a reflection of trading in financial markets)
Blekinge Institute of Technology, School of Engineering.
2010 (English)Independent thesis Advanced level (degree of Master (Two Years))Student thesis
Abstract [en]

The financial market has become an area of increasing research interest for mathematicians and statisticians in recent years. Mathematical models and methods are increasingly being applied to study various parameters of the market. One of the parameters that have attracted lots of interest is `volatility'. It is the measure of variability of prices of instruments (e.g. stock, options etc.) traded in the market. It is used mainly to measure risk and to predict future prices of assets. In this paper, the volatility of financial price processes is studied using the Ornstein-Uhlenbeck process. The process is a mean reverting model which has good and well documented properties to serve as a model for financial price processes. At some random time point, a parameter change in the distribution of the price process occurs. In order to control the development of prices, it is important to detect this change as quickly as possible. The methods for detecting such changes are called `stopping rules'. In this work, stopping rules will be derived and analysed. Using simulations and analytical methods, the properties of these stopping rules will be evaluated.

Place, publisher, year, edition, pages
2010. , p. 42
Keywords [en]
Change-point detection, Stopping rules, Ornstein-Uhlenbeck process, Volatility, Alarm function, Financial Markets.
National Category
Mathematical Analysis Mathematics Probability Theory and Statistics
Identifiers
URN: urn:nbn:se:bth-5570Local ID: oai:bth.se:arkivexCE7ADA1193FC21ABC12576CC00520D48OAI: oai:DiVA.org:bth-5570DiVA, id: diva2:832955
Uppsok
Physics, Chemistry, Mathematics
Supervisors
Note
+46736597026Available from: 2015-04-22 Created: 2010-02-16 Last updated: 2015-06-30Bibliographically approved

Open Access in DiVA

fulltext(302 kB)1227 downloads
File information
File name FULLTEXT01.pdfFile size 302 kBChecksum SHA-512
a44cc4cee45959360af045569eaf1c06e45e399e2b73eced503c8b3499d0785f6caef70d5b61dc0648fe89938a82a42279e8a87e271465bad3c2c48d0452c892
Type fulltextMimetype application/pdf

By organisation
School of Engineering
Mathematical AnalysisMathematicsProbability Theory and Statistics

Search outside of DiVA

GoogleGoogle Scholar
Total: 1228 downloads
The number of downloads is the sum of all downloads of full texts. It may include eg previous versions that are now no longer available

urn-nbn

Altmetric score

urn-nbn
Total: 596 hits
CiteExportLink to record
Permanent link

Direct link
Cite
Citation style
  • apa
  • ieee
  • modern-language-association-8th-edition
  • vancouver
  • Other style
More styles
Language
  • de-DE
  • en-GB
  • en-US
  • fi-FI
  • nn-NO
  • nn-NB
  • sv-SE
  • Other locale
More languages
Output format
  • html
  • text
  • asciidoc
  • rtf