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Deep learning methods have become a widespread toolbox for pricing and calibration of financial models. While they often provide new directions and research results, their `black box' nature also results in a lack of interpretability. We…

Computational Finance · Quantitative Finance 2024-12-02 Bo Yuan , Damiano Brigo , Antoine Jacquier , Nicola Pede

We adopt Deep Reinforcement Learning algorithms to design trading strategies for continuous futures contracts. Both discrete and continuous action spaces are considered and volatility scaling is incorporated to create reward functions which…

Computational Finance · Quantitative Finance 2019-11-25 Zihao Zhang , Stefan Zohren , Stephen Roberts

We inspect how accurate machine learning (ML) is at forecasting realized variance of the Dow Jones Industrial Average index constituents. We compare several ML algorithms, including regularization, regression trees, and neural networks, to…

Econometrics · Economics 2026-01-21 Kim Christensen , Mathias Siggaard , Bezirgen Veliyev

Uncertainty quantification is crucial in time series prediction, and quantile regression offers a valuable mechanism for uncertainty quantification which is useful for extreme value forecasting. Although deep learning models have been…

Machine Learning · Computer Science 2024-11-26 Jimmy Cheung , Smruthi Rangarajan , Amelia Maddocks , Xizhe Chen , Rohitash Chandra

This paper investigates whether structural econometric models can rival machine learning in forecasting energy--macro dynamics while retaining causal interpretability. Using monthly data from 1999 to 2025, we develop a unified framework…

Computational Finance · Quantitative Finance 2026-01-28 Fredy Pokou , Jules Sadefo Kamdem , Kpante Emmanuel Gnandi

Volatility prediction for financial assets is one of the essential questions for understanding financial risks and quadratic price variation. However, although many novel deep learning models were recently proposed, they still have a "hard…

Computational Finance · Quantitative Finance 2022-02-24 German Rodikov , Nino Antulov-Fantulin

This paper presents a comparative analysis of univariate and multivariate GARCH-family models and machine learning algorithms in modeling and forecasting the volatility of major energy commodities: crude oil, gasoline, heating oil, and…

Econometrics · Economics 2024-05-31 Seulki Chung

A long memory and non-linear realized volatility model class is proposed for direct Value at Risk (VaR) forecasting. This model, referred to as RNN-HAR, extends the heterogeneous autoregressive (HAR) model, a framework known for efficiently…

Risk Management · Quantitative Finance 2024-08-27 Rangika Peiris , Minh-Ngoc Tran , Chao Wang , Richard Gerlach

Recently, deep learning techniques are gradually replacing traditional statistical and machine learning models as the first choice for price forecasting tasks. In this paper, we leverage probabilistic deep learning for inferring the…

Machine Learning · Computer Science 2024-06-25 Héctor J. Hortúa , Andrés Mora-Valencia

Prognostic models in survival analysis are aimed at understanding the relationship between patients' covariates and the distribution of survival time. Traditionally, semi-parametric models, such as the Cox model, have been assumed. These…

Machine Learning · Statistics 2020-11-06 Denise Rava , Jelena Bradic

Standard methods and theories in finance can be ill-equipped to capture highly non-linear interactions in financial prediction problems based on large-scale datasets, with deep learning offering a way to gain insights into correlations in…

Computational Finance · Quantitative Finance 2020-04-22 Ben Moews , Gbenga Ibikunle

We propose a new class of financial volatility models, called the REcurrent Conditional Heteroskedastic (RECH) models, to improve both in-sample analysis and out-ofsample forecasting of the traditional conditional heteroskedastic models. In…

Econometrics · Economics 2022-01-25 T. -N. Nguyen , M. -N. Tran , R. Kohn

Predicting the S&P 500 index volatility is crucial for investors and financial analysts as it helps assess market risk and make informed investment decisions. Volatility represents the level of uncertainty or risk related to the size of…

Trading and Market Microstructure · Quantitative Finance 2024-07-25 Natalia Roszyk , Robert Ślepaczuk

In this paper, we show that the recent integration of statistical models with deep recurrent neural networks provides a new way of formulating volatility (the degree of variation of time series) models that have been widely used in time…

Machine Learning · Computer Science 2018-12-06 Rui Luo , Weinan Zhang , Xiaojun Xu , Jun Wang

Volatility forecasts play a central role among equity risk measures. Besides traditional statistical models, modern forecasting techniques based on machine learning can be employed when treating volatility as a univariate, daily…

Risk Management · Quantitative Finance 2024-08-09 Fernando Moreno-Pino , Stefan Zohren

Deep learning methods have gained popularity in recent years through the media and the relative ease of implementation through open source packages such as Keras. We investigate the applicability of popular recurrent neural networks in…

Applications · Statistics 2023-01-05 Andrew T. Karl , James Wisnowski , Lambros Petropoulos

The scheduling and operation of power system becomes prominently complex and uncertain, especially with the penetration of distributed power. Load forecasting matters to the effective operation of power system. This paper proposes a novel…

Computational Engineering, Finance, and Science · Computer Science 2019-05-10 Tinghui Ouyang , Yusen He , Huajin Li , Zhiyu Sun , Stephen Baek

Volatility clustering is a crucial property that has a substantial impact on stock market patterns. Nonetheless, developing robust models for accurately predicting future stock price volatility is a difficult research topic. For predicting…

Computational Finance · Quantitative Finance 2025-05-20 Ananda Chatterjee , Hrisav Bhowmick , Jaydip Sen

We investigate methods for forecasting multivariate realized covariances matrices applied to a set of 30 assets that were included in the DJ30 index at some point, including two novel methods that use existing (univariate) log of realized…

Econometrics · Economics 2024-12-17 Matias Quiroz , Laleh Tafakori , Hans Manner

In this study, we develop a unified volatility modeling framework that embeds GARCH dynamics directly within recurrent neural networks. We propose two interpretable hybrid architectures, GARCH-GRU and GARCH-LSTM, that integrate the…

Statistical Finance · Quantitative Finance 2025-11-25 Jingyi Wei , Steve Yang , Zhenyu Cui