Combination forecasts dominate S&P 500 volatility predictions, changing investment strategies.
Forecasting stock market volatility is a hot topic in research. Some studies prefer using implied volatility from options, but there's debate on whether combining different forecasts is better. This study shows that combining forecasts of S&P 500 volatility is more accurate than using just one method. This means the VIX, a popular measure of volatility, isn't just a mix of different forecasts, but a more reliable indicator on its own.