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The Black-Scholes implied volatility skew at the money of SPX options is known to obey a power law with respect to the time-to-maturity. We construct a model of the underlying asset price process which is dynamically consistent to the power…

Mathematical Finance · Quantitative Finance 2015-01-29 Masaaki Fukasawa

We investigate relaxation and correlations in a class of mean-reverting models for stochastic variances. We derive closed-form expressions for the correlation functions and leverage for a general form of the stochastic term. We also discuss…

Statistical Finance · Quantitative Finance 2024-04-12 M. Dashti Moghaddam , Zhiyuan Liu , R. A. Serota

Order cancellation process plays a crucial role in the dynamics of price formation in order-driven stock markets and is important in the construction and validation of computational finance models. Based on the order flow data of 18 liquid…

Statistical Finance · Quantitative Finance 2014-03-18 Gao-Feng Gu , Xiong Xiong , Wei Zhang , Yong-Jie Zhang , Wei-Xing Zhou

We study extremal statistics and return intervals in stationary long-range correlated sequences for which the underlying probability density function is bounded and uniform. The extremal statistics we consider e.g., maximum relative to…

Statistical Mechanics · Physics 2015-05-13 N. R. Moloney , J. Davidsen

We describe the impact of the intra-day activity pattern on the autocorrelation function estimator. We obtain an exact formula relating estimators of the autocorrelation functions of non-stationary process to its stationary counterpart.…

Statistical Finance · Quantitative Finance 2015-06-22 T. Gubiec , M. Wiliński

We study the statistical properties of return intervals $r$ between successive energy dissipation rates above a certain threshold $Q$ in three-dimensional fully developed turbulence. We find that the distribution function $P_Q(r)$ scales…

Fluid Dynamics · Physics 2009-10-07 Chuang Liu , Zhi-Qiang Jiang , Fei Ren , Wei-Xing Zhou

Many dynamical processes on real world networks display complex temporal patterns as, for instance, a fat-tailed distribution of inter-events times, leading to heterogeneous waiting times between events. In this work, we focus on…

Physics and Society · Physics 2016-05-25 Sarah De Nigris , Anthony Hastir , Renaud Lambiotte

Inspired by the recent literature on aggregation theory, we aim at relating the long range correlation of the stocks return volatility to the heterogeneity of the investors' expectations about the level of the future volatility. Based on a…

Statistical Finance · Quantitative Finance 2008-12-02 Jerome Coulon , Yannick Malevergne

In this paper, we investigate a Brownian motion (BM) with purely time dependent drift and difusion by suggesting and examining several Brownian functionals which characterize the lifetime and reactivity of such stochastic processes. We…

Statistical Mechanics · Physics 2016-09-15 Ashutosh Dubey , Malay Bandyopadhyay , A. M. Jayannavar

We investigate the probability distribution of the volatility return intervals $\tau$ for the Chinese stock market. We rescale both the probability distribution $P_{q}(\tau)$ and the volatility return intervals $\tau$ as…

Statistical Finance · Quantitative Finance 2009-11-13 Tian Qiu , Liang Guo , Guang Chen

This dissertation discusses the intermitency phenomenon in three models of turbulence, employing analytical and numerical techniques in the analysis of stochastic processes and the probability distributions which they induce. The initial…

Fluid Dynamics · Physics 2020-09-04 Gabriel B. Apolinário

We analyze the scaled voter model, which is a generalization of the noisy voter model with time-dependent herding behavior. We consider the case when the intensity of herding behavior grows as a power-law function of time. In this case, the…

Statistical Mechanics · Physics 2023-02-14 Rytis Kazakevičius , Aleksejus Kononovicius

Fractional Brownian motion, a Gaussian non-Markovian self-similar process with stationary long-correlated increments, has been identified to give rise to the anomalous diffusion behavior in a great variety of physical systems. The…

Stock price change in financial market occurs through transactions in analogy with diffusion in stochastic physical systems. The analysis of price changes in real markets shows that long-range correlations of price fluctuations largely…

Statistical Mechanics · Physics 2008-12-10 V. Gontis

The dynamics of prices in financial markets has been studied intensively both experimentally (data analysis) and theoretically (models). Nevertheless, a complete stochastic characterization of volatility is still lacking. What it is well…

Statistical Mechanics · Physics 2009-10-31 Michele Pasquini , Maurizio Serva

One of the standardized features of financial data is that log-returns are uncorrelated, but absolute log-returns or their squares namely the fluctuating volatility are correlated and is characterized by heavy tailed in the sense that some…

Statistical Finance · Quantitative Finance 2021-05-11 Geoffrey Ducournau

Stock prices are observed to be random walks in time despite a strong, long term memory in the signs of trades (buys or sells). Lillo and Farmer have recently suggested that these correlations are compensated by opposite long ranged…

Other Condensed Matter · Physics 2008-12-02 J. -P. Bouchaud , J. Kockelkoren , M. Potters

The energy and waiting time distributions are important properties for understanding the physical mechanism of repeating fast radio bursts (FRBs). Recently, the Five-hundred-meter Aperture Spherical radio Telescope (FAST) detected the…

High Energy Astrophysical Phenomena · Physics 2021-10-20 G. Q. Zhang , P. Wang , Q. Wu , F. Y. Wang , D. Li , Z. G. Dai , B. Zhang

Non-Poissonian bursty processes are ubiquitous in natural and social phenomena, yet little is known about their effects on the large-scale spreading dynamics. In order to characterize these effects we devise an analytically solvable model…

Physics and Society · Physics 2014-03-19 Hang-Hyun Jo , Juan I. Perotti , Kimmo Kaski , János Kertész

In recent years a new type of tradable assets appeared, generically known as cryptocurrencies. Among them, the most widespread is Bitcoin. Given its novelty, this paper investigates some statistical properties of the Bitcoin market. This…

Statistical Finance · Quantitative Finance 2017-08-16 Aurelio F. Bariviera , María José Basgall , Waldo Hasperué , Marcelo Naiouf