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Do you actually invest using these ideas? Why is a univariate Gaussian fit to recent sample data a good way to estimate risk!?
by apw 14y ago
Do you actually invest using these ideas? Why is a univariate Gaussian fit to recent sample data a good way to estimate risk!?
- retube 14y agoI don't mean to imply that stock prices are perfectly normal/lognormal/insert your favorite distro here. Nor do I mean to imply that future price action will match past price. It's just a simple model to illustrate that compared to historical price action you'd need a pretty big 2 day move for the stock to hit $17. How would you evaluate the risk/reward profile of this option?