New method boosts accuracy of predicting stock market volatility.
The article evaluates how well we can predict volatility using a type of mathematical model called stochastic volatility. By using a more accurate method to estimate this model, researchers found that they could make better predictions about how volatile asset returns will be in the future. This improved method takes into account the fact that the volatility of different assets can move together, which helps make the predictions more reliable. Overall, this new approach can significantly enhance our ability to forecast volatility in financial markets.