New model predicts market trends with changing relationships for better investments.
The article introduces a model that can analyze how two variables are related over time, even when this relationship changes. This model can adapt to shifts in the data, such as when a constant relationship between the variables may not hold true. By using a Bayesian approach, the model can test if these variables are linked and how this connection changes over time. The researchers applied this model to study the Fisher effect and equity market data, finding valuable insights into these financial phenomena.
