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We consider the problem of valuing a European option written on an asset whose dynamics are described by an exponential L\'evy-type model. In our framework, both the volatility and jump-intensity are allowed to vary stochastically in time…

Pricing of Securities · Quantitative Finance 2013-07-12 Matthew Lorig , Oriol Lozano-Carbassé

A general theory of efficient estimation for ergodic diffusion processes sampled at high frequency with an infinite time horizon is presented. High frequency sampling is common in many applications, with finance as a prominent example. The…

Statistics Theory · Mathematics 2024-01-10 Michael Sørensen

Given a sample from a discretely observed L\'evy process $X=(X_t)_{t\geq 0}$ of the finite jump activity, the problem of nonparametric estimation of the L\'evy density $\rho$ corresponding to the process $X$ is studied. An estimator of…

Statistics Theory · Mathematics 2018-04-17 Shota Gugushvili

In this paper we present some limit theorems for power variation of L\'evy semi-stationary processes in the setting of infill asymptotics. L\'evy semi-stationary processes, which are a one-dimensional analogue of ambit fields, are moving…

Probability · Mathematics 2016-10-17 Andreas Basse-O'Connor , Claudio Heinrich , Mark Podolskij

In mathematical finance, Levy processes are widely used for their ability to model both continuous variation and abrupt, discontinuous jumps. These jumps are practically relevant, so reliable inference on the feature that controls jump…

Statistics Theory · Mathematics 2021-09-21 Zhe Wang , Ryan Martin

Generalizing the concept of quantiles to the jump measure of a L\'evy process, the generalized quantiles $q_{\tau}^{\pm}>0$, for $\tau>0$, are given by the smallest values such that a jump larger than $q_{\tau}^{+}$ or a negative jump…

Statistics Theory · Mathematics 2015-06-19 Mathias Trabs

We study a class of nonlinear nonparametric inverse problems. Specifically, we propose a nonparametric estimator of the dynamics of a monotonically increasing trajectory defined on a finite time interval. Under suitable regularity…

Statistics Theory · Mathematics 2014-08-25 Debashis Paul , Jie Peng , Prabir Burman

In this article, the problem of semi-parametric inference on the parameters of a multidimensional L\'{e}vy process $L_t$ with independent components based on the low-frequency observations of the corresponding time-changed L\'{e}vy process…

Methodology · Statistics 2012-01-31 Denis Belomestny

This paper deals with optimally-robust parameter estimation in generalized Pareto distributions (GPDs). These arise naturally in many situations where one is interested in the behavior of extreme events as motivated by the…

Statistical Finance · Quantitative Finance 2015-03-17 Peter Ruckdeschel , Nataliya Horbenko

Due to their conjugate posteriors, Gaussian process priors are attractive for estimating the drift of stochastic differential equations with continuous time observations. However, their performance strongly depends on the choice of the…

Statistics Theory · Mathematics 2020-02-04 Jan van Waaij

We develop a novel Monte Carlo algorithm for the vector consisting of the supremum, the time at which the supremum is attained and the position at a given (constant) time of an exponentially tempered L\'evy process. The algorithm, based on…

Mathematical Finance · Quantitative Finance 2023-11-20 Jorge Ignacio González Cázares , Aleksandar Mijatović

This paper is concerned with the estimation of the volatility process in a stochastic volatility model of the following form: $dX_t=a_tdt+\sigma_tdW_t$, where $X$ denotes the log-price and $\sigma$ is a c\`adl\`ag semi-martingale. In the…

Statistical Finance · Quantitative Finance 2015-03-13 A. Alvarez , F. Panloup , M. Pontier , N. Savy

We consider the Graph Ornstein-Uhlenbeck (GrOU) process observed on a non-uniform discrete time grid and introduce discretised maximum likelihood estimators with parameters specific to the whole graph or specific to each component, or node.…

Methodology · Statistics 2022-07-12 Valentin Courgeau , Almut E. D. Veraart

We statistically analyse a multivariate HJM diffusion model with stochastic volatility. The volatility process of the first factor is left totally unspecified while the volatility of the second factor is the product of an unknown process…

Statistics Theory · Mathematics 2019-06-07 Olivier Féron , Pierre Gruet , Marc Hoffmann

We present a simulation methodology for Bayesian estimation of rate parameters in Markov jump processes arising for example in stochastic kinetic models. To handle the problem of missing components and measurement errors in observed data,…

Computation · Statistics 2010-09-01 Michael Amrein , Hans R. Kuensch

Recently, there has been rising interest in Bayesian optimization -- the optimization of an unknown function with assumptions usually expressed by a Gaussian Process (GP) prior. We study an optimization strategy that directly uses an…

Machine Learning · Statistics 2018-08-14 Zi Wang , Bolei Zhou , Stefanie Jegelka

A sampling-based method is introduced to approximate the Gittins index for a general family of alternative bandit processes. The approximation consists of a truncation of the optimization horizon and support for the immediate rewards, an…

Optimization and Control · Mathematics 2023-07-24 Stef Baas , Richard J. Boucherie , Aleida Braaksma

The extremal index $\theta$, a measure of the degree of local dependence in the extremes of a stationary process, plays an important role in extreme value analyses. We estimate $\theta$ semiparametrically, using the relationship between the…

Methodology · Statistics 2016-06-02 Paul J. Northrop

Stochastic processes are often used to model complex scientific problems in fields ranging from biology and finance to engineering and physical science. This paper investigates rate-optimal estimation of the volatility matrix of a…

Statistics Theory · Mathematics 2014-01-30 Minjing Tao , Yazhen Wang , Harrison H. Zhou

We introduce the entropic measure transform (EMT) problem for a general process and prove the existence of a unique optimal measure characterizing the solution. The density process of the optimal measure is characterized using a…

Mathematical Finance · Quantitative Finance 2019-02-22 Renjie Wang , Cody Hyndman , Anastasis Kratsios
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