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Be careful using this formula too naively. Predicting tomorrow's expected return is quite difficult, though predicting tomorrow's expected volatility is doable.
by tel 5y ago
Be careful using this formula too naively. Predicting tomorrow's expected return is quite difficult, though predicting tomorrow's expected volatility is doable.
- johndoe42377 5y agoNo, it is not. There must be a logical flaw somewhere in the middle. There are always factors out of consideration (they are evolving as you calculate) so probabilities will be always wrong. This principle cannot be shortcircuited. This is a wall.