科学研究
报告题目:

Modeling Maxima with Autoregressive Conditional Fr'echet Model

报告人:

报告时间:

报告地点:

报告摘要:

报告题目:

Modeling Maxima with Autoregressive Conditional Fr'echet Model

报 告 人:

Prof.Zhengjun Zhang(University of Wisconsin)

报告时间:

2017年12月15日 10:30--11:30

报告地点:

数学院二楼报告厅

报告摘要:

This talk introduces a novel dynamic generalized extreme value~(GEV) framework for modeling the time-varying behavior of maxima in financial time series. Specifically, an autoregressive conditional Fr'echet~(AcF) model is proposed in which the maxima are modeled by a Fr'echet distribution with time-varying scale parameter~(volatility) and shape parameter~(tail index) conditioned on past information. The AcF provides a direct and accurate modeling of the time-varying behavior of maxima and offers a new angle to study the tail risk dynamics in financial markets. Probabilistic properties of AcF are studied, and a maximum likelihood estimator is used for model estimation, with its statistical properties investigated. Simulations show the flexibility of AcF and confirm the reliability of its estimators. Two real data examples on cross-sectional stock returns and high-frequency foreign exchange returns are used to demonstrate the AcF modeling approach, where significant improvement over the static GEV has been observed for market tail risk monitoring and conditional VaR estimation. Empirical result of AcF is consistent with the findings of the dynamic peak-over-threshold~(POT) literature that the tail index of financial markets varies through time. (Joint work with Zifeng Zhao and Rong Chen).