ECONOMETRICS

What is Econometrics? Econometrics is a field in economics that applies statistical and mathematical methods to economic theories. It has become more relevant over the years as it helps economists quantify their economic theories and hypotheses. Econometrics helps economists test those theories by using statistical tools with mathematical equations. Therefore, it has become a crucial…

Read More Econometrics With R, Python and MATLAB

Econometrics is a field in economics that uses statistical and mathematical models to analyze economic data. This field is crucial in helping economists quantify economic models. By doing so, they can test existing economic models or build new ones. There are several tools that economists use within econometrics. These include regression analyses, probabilities, correlation analyses,…

Read More Econometric Forecasting Models

What is Econometrics? Econometrics is a field in economics that helps economists quantify economic theories. Historically, most economists only relied on economic theories and hypotheses. However, some of these theories were unproven due to the lack of quantified information available. With econometrics, economists were finally able to test those theories and develop new ones. Econometrics…

Read More Econometrics for Finance

In a previous post, we highlighted an article that showed how useful accounting numbers are. In this post, we will present a concrete example of an application of accounting numbers in portfolio management. Reference [1] showed that the Price-to-Earnings ratio is a mean-reverting process, and it can be accurately estimated by AR(1), an econometric model.…

Read More Using an Autoregressive Model to Predict the Price-to-Earnings Ratio and Develop an Investment Strategy

Econometrics has been an area of high interest within the economics world. While the concept comes from the early- to mid-1900s, it has developed rapidly over the last few decades. Econometrics primarily applies to the world of economics. However, it has also contributed a lot to the business world. Before understanding why econometrics is important…

Read More Why is Econometrics Important in Business?

Econometrics and statistics have common overlapping areas that some people may find confusing. While both of these fields deal with statistics and the relationship between data, they are different. Before learning how these two differ from each other, it is crucial to understand what they are. What is Econometrics? The term econometrics is a combination…

Read More What is the Difference Between Statistics and Econometrics?

We have previously presented time series analysis for identifying autocorrelation properties of stock indices and econometric techniques such as ARIMA and GARCH for estimating volatilities. We also highlighted an article [1] that demonstrated the usefulness of advanced volatility estimators in trading by reducing trading strategies’ turnover. On the same topic, Reference [2] attempted to directly…

Read More Are Econometric Models Useful in Trading?

Both econometrics and actuarial science involve similar areas of study. These include statistics, mathematics, economics, and finance. However, they usually have different applications and are prevalent in particular industries. Despite their similarities, however, both of these fields also differ from each other in various aspects. Before understanding those differences, it is crucial to look at…

Read More Econometrics vs Actuarial Science

Economics is a field of study that relates to analyzing various factors that affect a country’s economy. These factors include production, distribution, and consumption of goods and services, collectively termed as value. However, the field of economics usually involves theoretical analysis. When it comes to quantifying these theories, there are several options. These include econometrics…

Read More Econometrics vs Mathematical Economics

Data science and machine learning have allowed analysts to process data at more efficient rates. Due to the abundance of tools at disposal currently, the process has become much straightforward. Data science has contributed to many other fields, including economics. More particularly, it has enhanced how analysts use econometrics to process a large amount of…

Read More Econometrics and Data Science