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Forecasting high-frequency financial time series: an adaptive learning approach with the order book data

Parley Ruogu Yang

arXiv 27 Feb 2021 · Finance — Statistical Finance

arXiv:2103.00264 · PDF · DOI · OpenAlex · Extracted main text

Abstract

This paper proposes a forecast-centric adaptive learning model that engages with the past studies on the order book and high-frequency data, with applications to hypothesis testing. In line with the past literature, we produce brackets of summaries of statistics from the high-frequency bid and ask data in the CSI 300 Index Futures market and aim to forecast the one-step-ahead prices. Traditional time series issues, e.g. ARIMA order selection, stationarity, together with potential financial applications are covered in the exploratory data analysis, which pave paths to the adaptive learning model. By designing and running the learning model, we found it to perform well compared to the top fixed models, and some could improve the forecasting accuracy by being more stable and resilient to non-stationarity. Applications to hypothesis testing are shown with a rolling window, and further potential applications to finance and statistics are outlined.

Citation extraction

27
references
36
in-text mentions
27
distinct cited
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main-text words

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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
1Yang, Parley Ruogu (2020) Using The Yield Curve To Forecast Economic Growth self0.81142100%
2Sirignano, Justin, Cont, Rama (2018) Universal features of price formation in financial markets: perspectives from Deep Learning0.73732100%
3Harvey, Andrew C (2013) Dynamic Models for Volatility and Heavy Tails: With Applications to Financial and Economic Time Series0.64422100%
4(1974) A new look at the statistical model identification0.64422100%
5Klenke, Achim (2013) Probability Theory: A Comprehensive Course0.64422100%
6Vapnik, Vladimir N (2000) The Nature of Statistical Learning Theory0.64422100%
7Harvey, Andrew C, Sucarrat, Genaro (2014) EGARCH models with fat tails, skewness and leverage0.40511100%
8Avellaneda, Marco, Reed, Josh, Stoikov, Sasha (2011) Forecasting prices from level-I quotes in the presence of hidden liquidity0.40511100%
9Andres, Philipp, Harvey, Andrew C (2012) The Dyanamic Location/Scale Model: with applications to intra-day financial data0.40511100%
10Casella, George, Berger, Roger L (2008) Statistical Inference0.40511100%

Showing the top 10 of 27 scored citations.