Relative Strength Index (RSI) serves as a measure of price stability within an equity, and though not being an outright measure of risk, RSI can be helpful for some investors. When RSI decreases, “risk” decreases, and when RSI increases, “risk” increases, at least in the traditional sense of risk. Given…

We used vector autoregression followed by Monte Carlo simulation as a means of modeling equity pricing data, then back-tested our findings against known pricing. We selected LLY as our stock for both methods and used pricing data from December 2015 through November 2020. In fairness, there were no specific criteria…

The market is considered by many as one of the chief indicators of US economic stability. Whether the market indeed serves as a good indicator of such is usually left to those with more time to think and less time to do, but in today’s state of turmoil, society certainly…

Precious metals have long been considered sound investment alternatives for many investors, with gold being held as the most popular. The most touted claim by large brokerage firms is that precious metals are strong hedges against inflation, but as we have proven on numerous occasions, such is not true, especially…

Time series analysis is an econometric technique economists, researchers, and other analysts use to model and subsequently forecast data, or moreover, other times series, where times are discrete (t=1,2,3…n) or continuous (t>0). It is most useful on large data sets, and consists of three primary components, including seasonality, trend, and…

Above all other questions we receive, the most frequent question involves our expectations of the market. Of course, you would have to pry all we know from our cold hands. While we may not always know exactly where the market is headed, we are nearly always very close. Even then,…

In financial economics, we face uncertainty every day, but rather than being fearful of risk, we leverage risk to our advantage to increase financial output. We do so through a host of methods and techniques in various analytical mixes as we solve complex problems, such as knowing exactly which assets…

With no argument, the US has spiraled to new lows politically, economically, and socially the last several years. With any glimmer of hope of having a sound leader politically, economically, and socially the next few years gone, the US faces issues we may never resolve, let alone overcome. Consider where…

Volatility within the discipline of financial economics is a fundamental measure of statistics describing dispersion in the returns of given assets, indexes, or similar sets of data, while dispersion is a measure that notes the extent to which data vary about the mean. To some degree, dispersion notes stability within…

Beta and Sharpe ratio are two of the most fundamental expressions in investment economics, but so few seem to really understand them, and even fewer can calculate them. In a statistical sense, beta, or beta coefficient, as it is technically, is found in regression analysis. Regression assumes three constructs, including…

Hedge funds were developed in the late 1940s as a means of giving financially savvy investors more control over their investments by allowing them to leverage pooled funds through a limited partnership that gages risk against growth in an attempt of reducing losses. Contrary to commonly accepted understanding, hedge fund…

The Market. Those collective financial instruments we affectionately love and hate with each swing of the investment pendulum. We love it. We hate it. Often, we even loath it. The market is that one suject that simultaneously creates unity and discord across sophisticated persons in civilized economies. Such is debated…