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We study an optimal execution problem in the presence of market impact where the security price follows a geometric Ornstein-Uhlenbeck process, which implies the mean-reverting property, and show that the optimal strategy is a mixture of…

Trading and Market Microstructure · Quantitative Finance 2014-07-30 Takashi Kato

Ornstein-Uhlenbeck process of bounded variation is introduced as a solution of an analogue of the Langevin equation with an integrated telegraph process replacing a Brownian motion. There is an interval $I$ such that the process starting…

Probability · Mathematics 2020-07-17 Nikita Ratanov

This paper develops a new stochastic volatility model for the temperature that is a natural extension of the Ornstein-Uhlenbeck model proposed by Benth and Benth (2007). This model allows to be more conservative regarding extreme events…

Risk Management · Quantitative Finance 2023-08-11 Aurélien Alfonsi , Nerea Vadillo

We introduce a model for the dynamics of stock prices based on a non quadratic path integral. The model is a generalization of Ilinski's path integral model, more precisely we choose a different action, which can be tuned to different time…

Computational Finance · Quantitative Finance 2018-12-26 Giovanni Paolinelli , Gianni Arioli

Statistical testing is classically used as an exploratory tool to search for association between a phenotype and many possible explanatory variables. This approach often leads to multiple testing under dependence. We assume a hierarchical…

Applications · Statistics 2021-09-28 Antoine Bichat , Christophe Ambroise , Mahendra Mariadassou

Given the observation of a high-dimensional Ornstein-Uhlenbeck (OU) process in continuous time, we proceed to the inference of the drift parameter under a row-sparsity assumption. Towards that aim, we consider the negative log-likelihood of…

Machine Learning · Statistics 2017-07-12 Stéphane Gaïffas , Gustaw Matulewicz

The Ornstein-Uhlenbeck process can be seen as a paradigm of a finite-variance and statistically stationary rough random walk. Furthermore, it is defined as the unique solution of a Markovian stochastic dynamics and shares the same local…

Probability · Mathematics 2021-10-05 Laurent Chevillard , Marc Lagoin , Stephane G. Roux

We consider the problem of modelling restricted interactions between continuously-observed time series as given by a known static graph (or network) structure. For this purpose, we define a parametric multivariate Graph Ornstein-Uhlenbeck…

Statistics Theory · Mathematics 2021-07-08 Valentin Courgeau , Almut E. D. Veraart

We present a Monte Carlo approach to pairs trading on mean-reverting spreads modeled by L\'evy-driven Ornstein-Uhlenbeck processes. Specifically, we focus on using a variance gamma driving process, an infinite activity pure jump process to…

Computational Finance · Quantitative Finance 2024-02-02 Tim Leung , Kevin W. Lu

We investigate the generative capabilities of the Schr\"odinger Bridge (SB) approach for time series. The SB framework formulates time series synthesis as an entropic optimal interpolation transport problem between a reference probability…

Machine Learning · Computer Science 2025-10-27 Alexandre Alouadi , Baptiste Barreau , Laurent Carlier , Huyên Pham

The financial industry is increasingly seeking robust methods to address the challenges posed by data scarcity and low signal-to-noise ratios, which limit the application of deep learning techniques in stock market analysis. This paper…

Machine Learning · Computer Science 2025-01-03 Guangming Che

Data plays a fundamental role in consolidating markets, services, and products in the digital financial ecosystem. However, the use of real data, especially in the financial context, can lead to privacy risks and access restrictions,…

The purpose of this work is to explore the role that arbitrage opportunities play in pricing financial derivatives. We use a non-equilibrium model to set up a stochastic portfolio, and for the random arbitrage return, we choose a stationary…

General Mathematics · Mathematics 2015-06-26 Sergei Fedotov , Stephanos Panayides

With the dynamic political and economic environments, the ever-changing stock markets generate large amounts of data daily. Acquiring up-to-date data is crucial to enhancing predictive precision in stock price behavior studies. However,…

Computational Engineering, Finance, and Science · Computer Science 2023-08-28 Arunima Mandal , Yuanhang Shao , Xiuwen Liu

We study the exponential Ornstein-Uhlenbeck stochastic volatility model and observe that the model shows a multiscale behavior in the volatility autocorrelation. It also exhibits a leverage correlation and a probability profile for the…

Other Condensed Matter · Physics 2008-12-02 Jaume Masoliver , Josep Perello

Time series data arising in many applications nowadays are high-dimensional. A large number of parameters describe features of these time series. We propose a novel approach to modeling a high-dimensional time series through several…

Methodology · Statistics 2024-08-22 Arkaprava Roy , Anindya Roy , Subhashis Ghosal

We derive the Markov-modulated generalized Ornstein-Uhlenbeck process by embedding a Markov-modulated random recurrence equation in continuous time. The obtained process turns out to be the unique solution of a certain stochastic…

Probability · Mathematics 2020-12-22 Anita Behme , Apostolos Sideris

We develop efficient methods for simulating processes of Ornstein-Uhlenbeck type related to the class of $p$-tempered $\alpha$-stable ($\ts$) distributions. Our results hold for both the univariate and multivariate cases and we consider…

Probability · Mathematics 2022-03-02 Michael Grabchak , Piergiacomo Sabino

We introduce an algorithm to improve the error scaling of product formulas by randomly sampling the generator of their exact error unitary. Our approach takes an arbitrary product formula of time $t$, $S_k(t)$ with error $O(t^{k+1})$ and…

Quantum Physics · Physics 2025-08-26 Lana Mineh , Adrian Chapman , Raul A. Santos

This research investigates efficiency on-line learning Algorithms to generate trading signals.I employed technical indicators based on high frequency stock prices and generated trading signals through ensemble of Random Forests. Similarly,…

Statistical Finance · Quantitative Finance 2020-07-23 Omid Safarzadeh