In Big Data we often come across when we have more features than the sample data for our model, so we reduce the features using PCA or SVD or any other algorithm to reduce the features Similarly in the field of Finance when one is making a Volatility model or…

Not a Blog, Just Writing Notes for Myself :-) In most of the Financial models, we have a linear or Quadratic Optimizer which needs to be maximized or minimized accordingly with a certain set of constraints. In the CAPM model, we assumed linearity in the models and solved for expected…

Not A blog Just Writing Notes For Myself :) Problem Statement: We have monthly data of a Stock and we are gonna predict the average monthly price of a stock by comparing previous months prices So before that, we need to see how much predictor variable is related to our…

Not a Blog just Notes for myself :) Let’s Take Two Asset in risk-return Space which is also known as a mean-variance framework where on our X-axis we have variance or std-dev (risk) while on the Y-axis we have our returns pf the Asset We Got 2 Assests A and…

Not a blog writing notes for myself :) Why Factor investing is important and why it matters? Securities(stocks, bonds…etc) earn their risk premium(It represents payment to investors for tolerating the extra risk in a given investment over that of a risk-free asset) through exposure to a small number of rewarded risk factors Factors are fundamentally broad, persistent characteristics that…