New model predicts stock market crashes before they happen!
The article introduces a new method to better understand how different financial markets are connected. By using a special model called a mixture copula, researchers can see how these markets influence each other, especially during times of crisis. The method helps to accurately estimate and select the best model for analyzing the relationships between international stock markets. The study shows that the new approach can reveal significant changes in how these markets depend on each other over time, providing valuable insights for risk management.