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This book chapter illustrates how to apply extreme value statistics to financial time series data. Such data often exhibits strong serial dependence, which complicates assessment of tail risks. We discuss the two main approches to tail risk…

Risk Management · Quantitative Finance 2024-09-30 Anna Kiriliouk , Chen Zhou

The study of loss function distributions is critical to characterize a model's behaviour on a given machine learning problem. For example, while the quality of a model is commonly determined by the average loss assessed on a testing set,…

Machine Learning · Computer Science 2023-06-06 Etrit Haxholli , Marco Lorenzi

We develop an efficient simulation algorithm for computing the tail probabilities of the infinite series $S = \sum_{n \geq 1} a_n X_n$ when random variables $X_n$ are heavy-tailed. As $S$ is the sum of infinitely many random variables, any…

Probability · Mathematics 2016-09-08 Henrik Hult , Sandeep Juneja , Karthyek Murthy

The study of multivariate extremes is dominated by multivariate regular variation, although it is well known that this approach does not provide adequate distinction between random vectors whose components are not always simultaneously…

Statistics Theory · Mathematics 2021-08-17 Natalia Nolde , Jennifer L. Wadsworth

Network data sets are often constructed by some kind of thresholding procedure. The resulting networks frequently possess properties such as heavy-tailed degree distributions, clustering, large connected components and short average…

Social and Information Networks · Computer Science 2020-06-02 George T. Cantwell , Yanchen Liu , Benjamin F. Maier , Alice C. Schwarze , Carlos A. Serván , Jordan Snyder , Guillaume St-Onge

We propose a simple data model inspired from natural data such as text or images, and use it to study the importance of learning features in order to achieve good generalization. Our data model follows a long-tailed distribution in the…

Machine Learning · Computer Science 2023-01-02 Thomas Laurent , James H. von Brecht , Xavier Bresson

In traditional logistic regression models, the link function is often assumed to be linear and continuous in predictors. Here, we consider a threshold model that all continuous features are discretized into ordinal levels, which further…

Methodology · Statistics 2022-02-18 Yinan Lin , Wen Zhou , Zhi Geng , Gexin Xiao , Jianxin Yin

This paper introduces a flexible framework for the estimation of the conditional tail index of heavy tailed distributions. In this framework, the tail index is computed from an auxiliary linear regression model that facilitates estimation…

Econometrics · Economics 2024-09-23 João Nicolau , Paulo M. M. Rodrigues

Risk contagion concerns any entity dealing with large scale risks. Suppose (X,Y) denotes a risk vector pertaining to two components in some system. A relevant measurement of risk contagion would be to quantify the amount of influence of…

Statistics Theory · Mathematics 2017-04-26 Bikramjit Das , Vicky Fasen

Motivated by the problem of identifying correlations between genes or features of two related biological systems, we propose a model of \emph{feature selection} in which only a subset of the predictors $X_t$ are dependent on the…

Applications · Statistics 2011-11-29 Charles Zheng , Scott Schwartz , Robert Chapkin , Raymond Carroll , Ivan Ivanov

Impact assessment of natural hazards requires the consideration of both extreme and non-extreme events. Extensive research has been conducted on the joint modeling of bulk and tail in univariate settings; however, the corresponding body of…

Methodology · Statistics 2026-03-31 Chenglei Hu , Ben Swallow , Daniela Castro-Camilo

This paper introduces a general regularized thresholded least-square procedure estimating a structured signal $\theta_*\in\mathbb{R}^d$ from the following observations: $y_i = f(\langle\mathbf{x}_i, \theta_*\rangle,…

Statistics Theory · Mathematics 2018-04-18 Xiaohan Wei

Big data can easily be contaminated by outliers or contain variables with heavy-tailed distributions, which makes many conventional methods inadequate. To address this challenge, we propose the adaptive Huber regression for robust…

Statistics Theory · Mathematics 2018-10-11 Qiang Sun , Wenxin Zhou , Jianqing Fan

Accurate forecasting of risk is the key to successful risk management techniques. Using the largest stock index futures from twelve European bourses, this paper presents VaR measures based on their unconditional and conditional…

Risk Management · Quantitative Finance 2011-03-30 John Cotter

The dual problem of testing the predictive significance of a particular covariate, and identification of the set of relevant covariates is common in applied research and methodological investigations. To study this problem in the context of…

Statistics Theory · Mathematics 2015-06-11 Julian A. A. Collazos , Adriano Z. Zambom

Independence analysis is an indispensable step before regression analysis to find out essential factors that influence the objects. With many applications in machine Learning, medical Learning and a variety of disciplines, statistical…

Methodology · Statistics 2022-07-08 Wenliang Pan , Yujue Li , Jianwu Liu , Pei Dang , Weixiong Mai

Preferential attachment models of network growth are bivariate heavy tailed models for in- and out-degree with limit measures which either concentrate on a ray of positive slope from the origin or on all of the positive quadrant depending…

Statistics Theory · Mathematics 2023-12-29 Tiandong Wang , Sidney I. Resnick

Designs conditions for marine structures are typically informed by threshold-based extreme value analyses of oceanographic variables, in which excesses of a high threshold are modelled by a generalized Pareto (GP) distribution. Too low a…

Methodology · Statistics 2016-06-02 Paul Northrop , Nicolas Attalides , Philip Jonathan

The most popular approach in extreme value statistics is the modelling of threshold exceedances using the asymptotically motivated generalised Pareto distribution. This approach involves the selection of a high threshold above which the…

Methodology · Statistics 2014-05-27 Ioannis Papastathopoulos , Jonathan A. Tawn

Recently, deep neural networks have been found to nearly interpolate training data but still generalize well in various applications. To help understand such a phenomenon, it has been of interest to analyze the ridge estimator and its…

Statistics Theory · Mathematics 2024-05-03 Libin Liang , Zhiqiang Tan
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