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Study on Dynamic Hedging Strategy Based on Multivariate Stochastic Volatility Model
Author: ZhangHongXi
Tutor: ZhouYing
School: Dalian University of Technology
Course: Accounting
Keywords: Dynamic Hedging DC-MSV model Minimum variance hedge ratio
CLC: F713.35
Type: Master's thesis
Year: 2008
Downloads: 169
Quote: 5
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Abstract
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An important function of the futures market is to avoid price risk . Hedgers give some compensation to the transfer of risk to those speculators willing to take risks . The hedging the core of the problem is the determination of the optimal hedge ratio . Select a a reasonable hedging model to determine the optimal hedge ratio , hedging effect can be improved effectively circumvent the spot price risk. This paper is divided into five chapters . The first chapter analyzes the significance of the topic of the paper , the progress and shortcomings of existing research , the research framework and main content . The second chapter is a review of the existing hedging theory and three types of commonly used model . The third chapter is the theoretical study of dynamic hedging model based on dynamic correlation coefficient multivariate random fluctuations ( referred to as the DC-MSV) . Chapter DC-MSV - based dynamic hedging model empirical and comparative study with three commonly used model . Based on the characteristics of random fluctuations of the spot and futures prices , the introduction of a new dynamic correlation coefficient , DC-MSV - based dynamic hedging model . The article 's main innovation is the DC-MSV model to estimate the dynamic hedge ratio . First, the specific characteristics of hedge ratio with time-varying characteristics of the standard deviation of the yield function reveals the time-varying characteristics of the optimal hedge ratio . The second is through the establishment of a function of the yield correlation coefficient with time-varying characteristics of DC-MSV model reveals promote asset price volatility factors to estimate the cross - correlation of asset volatility . Third , empirical studies have shown that the model of the article is better than the popular existing hedging model . Articles empirical research through the establishment of a dynamic hedging strategy than copper spot and futures - based minimum variance hedge hedging models , the results show that the article in the sample period and sample hedging effect for the period are significantly better than Na (?) ve, OLS and GARCH hedging strategy .
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CLC: > Economic > Trade and Economic > Domestic Trade and Economic > The circulation of commodities and the market > Sale of goods > Futures Trading
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