New model accurately predicts daily volatility in financial markets
The article explores different ways to predict how much prices of financial assets will change each day. They use complex math models to estimate and forecast this daily volatility. By averaging different models, they found a method that gives more accurate long-term predictions. They also developed a new way to estimate volatility persistence, which is how much prices keep changing in the same direction. Their method outperformed traditional techniques in predicting volatility.