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Financial market dynamics is rigorously studied via the exact generalized Langevin equation. Assuming market Brownian self-similarity, the market return rate memory and autocorrelation functions are derived, which exhibit an…

Statistical Finance · Quantitative Finance 2013-06-17 R. Tsekov

In this brief article I show how the notion of coarse graining and the Renormalization Group enter naturally in the dynamics of genetic systems, in particular in the presence of recombination. I show how the latter induces a dynamics…

Condensed Matter · Physics 2007-05-23 Christopher R. Stephens

We review recent progress in modeling credit risk for correlated assets. We start from the Merton model which default events and losses are derived from the asset values at maturity. To estimate the time development of the asset values, the…

Risk Management · Quantitative Finance 2018-03-02 Andreas Mühlbacher , Thomas Guhr

The subject of the present article is the study of correlations between large insurance companies and their contribution to systemic risk in the insurance sector. Our main goal is to analyze the conditional structure of the correlation on…

General Economics · Economics 2019-05-10 Anna Denkowska , Stanisław Wanat

We study the dynamic interactions and structural changes in global financial indices in the years 1998-2012. We apply a principal component analysis (PCA) to cross-correlation coefficients of the stock indices. We calculate the correlations…

Physics and Society · Physics 2016-02-17 Ashadun Nobi , Jae Woo Lee

A pairwise clustering approach is applied to the analysis of the Dow Jones index companies, in order to identify similar temporal behavior of the traded stock prices. To this end, the chaotic map clustering algorithm is used, where a map is…

Disordered Systems and Neural Networks · Physics 2010-01-31 N. Basalto , R. Bellotti , F. De Carlo , P. Facchi , S. Pascazio

We consider the gauged free fermionic matrix model, for a single fermionic matrix. In the large $N$ limit this system describes a $c=1/2$ chiral fermion in $1+1$ dimensions. The Gauss' law constraint implies that to obtain a physical state,…

High Energy Physics - Theory · Physics 2019-05-01 David Berenstein , Robert de Mello Koch

We investigate the emergence of long-range correlations in granular shear flow. By increasing the density of a simulated granular flow we observe a spontaneous transition from a dilute regime, where interactions are dominated by binary…

Soft Condensed Matter · Physics 2009-11-11 Gregg Lois , Anael Lemaitre , Jean M. Carlson

We propose a highly coarse-grained simulation model for crystalline polymer solids with crystalline lamellar structures. The mechanical properties of a crystalline polymer solid are mainly determined by the crystalline lamellar structures.…

Soft Condensed Matter · Physics 2025-01-13 Takashi Uneyama

In this work, we present a new approach for constructing models for correlation matrices with a user-defined graphical structure. The graphical structure makes correlation matrices interpretable and avoids the quadratic increase of…

Financial market is an example of complex system, which is characterized by a highly intricate organization and the emergence of collective behavior. In this paper, we quantify this emergent dynamics in the financial market by using…

General Finance · Quantitative Finance 2011-09-07 Thomas Kauê Dal'Maso Peron , Francisco Aparecido Rodrigues

Correlation networks derived from multivariate data appear in many applications across the sciences. These networks are usually dense and require sparsification to detect meaningful structure. However, current methods for sparsifying…

Physics and Society · Physics 2023-03-06 Magnus Neuman , Viktor Jonsson , Joaquín Calatayud , Martin Rosvall

The volatility of financial instruments is rarely constant, and usually varies over time. This creates a phenomenon called volatility clustering, where large price movements on one day are followed by similarly large movements on successive…

Statistical Finance · Quantitative Finance 2015-05-08 Gordon J. Ross

In this paper, we discuss information-theoretic tools for obtaining optimized coarse-grained molecular models for both equilibrium and non-equilibrium molecular dynamics. The latter are ubiquitous in physicochemical and biological…

Numerical Analysis · Mathematics 2016-04-20 Vagelis Harmandaris , Evangelia Kalligiannaki , Markos A. Katsoulakis , Petr Plecháč

Coarse-grained (CG) models are often parametrized to reproduce one-dimensional structural correlation functions of an atomically-detailed model along the degrees of freedom governing each interaction potential. While cross correlations…

Soft Condensed Matter · Physics 2019-12-02 Svenja J. Woerner , Tristan Bereau , Kurt Kremer , Joseph F. Rudzinski

We compare some methods recently used in the literature to detect the existence of a certain degree of common behavior of stock returns belonging to the same economic sector. Specifically, we discuss methods based on random matrix theory…

Disordered Systems and Neural Networks · Physics 2008-12-02 C. Coronnello , M. Tumminello , F. Lillo , S. Miccichè , R. N. Mantegna

Granular convergence is a property of a granular pack as it is repeatedly sheared in a cyclic, quasistatic fashion, as the packing configuration changes via discrete events. Under suitable conditions the set of microscopic configurations…

Soft Condensed Matter · Physics 2023-08-25 Anna Movsheva , Thomas A. Witten

Coarse graining model is a promising way to analyze and visualize large-scale networks. The coarse-grained networks are required to preserve the same statistical properties as well as the dynamic behaviors as the initial networks. Some…

Physics and Society · Physics 2011-05-31 An Zeng , Linyuan Lu

In this paper we provide a comprehensive analysis of a structural model for the dynamics of prices of assets traded in a market originally proposed in [1]. The model takes the form of an interacting generalization of the geometric Brownian…

Statistical Finance · Quantitative Finance 2018-06-06 Kartik Anand , Jonathan Khedair , Reimer Kuehn

There has been a lot of recent interest in mining patterns from graphs. Often, the exact structure of the patterns of interest is not known. This happens, for example, when molecular structures are mined to discover fragments useful as…

Data Structures and Algorithms · Computer Science 2007-05-23 Pavel Dmitriev , Carl Lagoze