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A Residual Bootstrap for Conditional Value-at-Risk

Eric Beutner, Alexander Heinemann, Stephan Smeekes

arXiv 28 Aug 2018 · Econometrics

arXiv:1808.09125 · PDF · Extracted main text

Abstract

A fixed-design residual bootstrap method is proposed for the two-step estimator of Francq and Zako\"ian (2015) associated with the conditional Value-at-Risk. The bootstrap's consistency is proven for a general class of volatility models and intervals are constructed for the conditional Value-at-Risk. A simulation study reveals that the equal-tailed percentile bootstrap interval tends to fall short of its nominal value. In contrast, the reversed-tails bootstrap interval yields accurate coverage. We also compare the theoretically analyzed fixed-design bootstrap with the recursive-design bootstrap. It turns out that the fixed-design bootstrap performs equally well in terms of average coverage, yet leads on average to shorter intervals in smaller samples. An empirical application illustrates the interval estimation.

Citation extraction

61
references
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in-text mentions
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distinct cited
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Most heavily cited references

The works this paper leans on most, across its whole bibliography — not restricted to papers in our corpus. Ranked by composite intensity, which combines how often a work is mentioned, how many sections mention it, and how much of that falls in the main text rather than the appendix.

ReferenceIntensityMentionsSectionsMain text
1Falk, M. and E. Kaufmann (1991) Coverage probabilities of bootstrap-confidence intervals for quantiles1.00093100%
2Cavaliere, G., R.S. Pedersen, and A. Rahbek (2018) The fixed volatility bootstrap for a class of ARCH($q$) models1.00054100%
3Spierdijk, L (2016) Confidence intervals for ARMA–GARCH value-at-risk: the case of heavy tails and skewness0.92843100%
4Francq, C. and J.M. Zakoän (2015) Risk-parameter estimation in volatility models0.88119668%
5Gao, F. and F. Song (2008) Estimation risk in GARCH VaR and ES estimates0.87452100%
6Shimizu, K (2009) Bootstrapping Stationary ARMA–GARCH Models0.87452100%
7Beutner, E., A. Heinemann, and S. Smeekes (2021) A justification of conditional confidence intervals self0.84521290%
8Cavaliere, G., H.B. Nielsen, R.S. Pedersen, and A. Rahbek (2022) Bootstrap inference on the boundary of the parameter space, with application to conditional volatility models0.84333100%
9Francq, C. and J.M. Zakoïan (2011) GARCH Models: Structure, Statistical Inference and Financial Applications0.83612358%
10Berkes, I. and L. Horváth (2003) Limit results for the empirical process of squared residuals in GARCH models0.7547343%

Showing the top 10 of 134 scored citations.

Cited by, within the corpus

arXiv econ.EM papers that cite this one, ranked by how heavily they lean on it.

Citing paperIntensityMentionsSections
1V1 A Residual Bootstrap for Conditional Expected Shortfall0.809517
2A Bootstrap Test for the Existence of Moments for GARCH Processes0.540194
3Estimating Conditional Value-at-Risk with Nonstationary Quantile Predictive Regression Models0.40511