Well, imagine that your goal is to always have a certain part of your portfolio invested in VIX futures. If the futures contracts are always more expensive than the current VIX level, then you pay a premium every time you buy futures. You're essentially buying high and selling low, which...
How Does VIX Work? Volatility is the measure of price fluctuations over a certain period of time. It’s calculated by looking at the historic price movements of a company and factoring in variables such as mean, variance and standard deviation. Applying them to a stock’s historical price per...
What does the investment’s price chart look like? Crazier zigzags = more volatile Smooth price changes = less volatile What could go wrong with the investment? If a company has been in the news because it may go bankrupt, its bonds will probably be pretty volatile. ...
Experts understand what the VIX is telling them through the lens ofmean reversion. In finance, mean reversion is a key principle that suggests asset prices generally remain close to their long-term averages. If prices gain a great deal very quickly, or fall very far, very rapidly, the princ...
The uncertainty associated with the first pandemic in 100 years certainly amplified the move higher in the VIX in that example, but it does illustrate the point of the traditional inverse correlation between stocks and the VIX very well.
Market volatility describes the dispersion around the mean price of a security. Find out why many traders make it part of their strategy.
The results surprisingly are not generic looking at all if you learn to use it, but it's true that the "text to image" workflow does not give you enough control to straight up generate assets (and the quality is not good enough either). Midjourney...
This estimator does not depend upon vt. It guarantees that xt is positive and has a mean of one. It is presumably consistent as N goes to infinity with T finite or potentially increasing more slowly than N. 5.3. Estimating the global COVOL model The covariance matrix in (13) is ...
Watch what Warren does in 2020! Within 45 days of the end of every quarter, market big-wigs have to file what’s called a 13F form. (“Big Wig” is defined as hedge fund managers and CEOs like Berkshire Hathaway’sWarren Buffettwho have the pow...
How Does the Choice of Index or Sector Tracked by an ETF Impact Its Liquidity? The choice of the index or sector tracked by an ETF can significantly affect its liquidity. If an ETF tracks a well-known, widely followed index with liquid underlying assets, it's likely to have better liquidi...