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162
kategorie
2 032
podkategorie
23 060
pojęcia
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pojęcia

ARCH Model

Autoregressive Conditional Heteroskedasticity model introduced by Engle (1982) where conditional variance is a linear function of past squared errors.

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GARCH Model

Generalized Autoregressive Conditional Heteroskedasticity model developed by Bollerslev (1986) extending ARCH by including past conditional variances in the variance equation.

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Leverage Effect

Phenomenon where negative shocks to returns increase future volatility more than positive shocks of the same magnitude, captured by EGARCH or TGARCH models.

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Volatility Persistence

Measure of how quickly volatility shocks dissipate, determined by the sum of ARCH and GARCH parameters in a GARCH(p,q) model.

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EGARCH Model

Exponential GARCH model by Nelson (1991) that captures the leverage effect and ensures positive variance by modeling the logarithm of conditional variance.

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GJR-GARCH Model

GARCH model by Glosten, Jagannathan and Runkle (1993) that incorporates an asymmetric term to differently model the impact of positive and negative shocks on volatility.

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IGARCH Model

Integrated GARCH model where the sum of parameters equals 1, implying infinite persistence of volatility shocks and a unit root in the variance process.

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APARCH Model

Asymmetric Power GARCH model by Ding, Granger and Engle (1993) that generalizes several GARCH models by including a power parameter and a leverage effect.

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FIGARCH Model

Fractionally Integrated GARCH model that captures long memory in volatility by allowing hyperbolic rather than exponential persistence.

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Multivariate GARCH Model

Extension of univariate GARCH models to simultaneously model conditional variances and covariances of multiple time series.

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Variance Forecasting

Main application of GARCH models involving projecting future conditional variance over different time horizons for risk management.

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CGARCH Model

Component GARCH model that separates volatility into a transitory component and a long-term component, allowing for better modeling of persistence.

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HARCH Model

Heterogeneous GARCH model that includes volatility terms at different time horizons to capture long memory effects in financial markets.

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