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On a quantile autoregressive conditional duration model applied to high-frequency financial data

Helton Saulo, Narayanaswamy Balakrishnan, Roberto Vila

arXiv 8 Sep 2021 · Statistics — Methodology

arXiv:2109.03844 · PDF · DOI · OpenAlex · Extracted main text

Abstract

Autoregressive conditional duration (ACD) models are primarily used to deal with data arising from times between two successive events. These models are usually specified in terms of a time-varying conditional mean or median duration. In this paper, we relax this assumption and consider a conditional quantile approach to facilitate the modeling of different percentiles. The proposed ACD quantile model is based on a skewed version of Birnbaum-Saunders distribution, which provides better fitting of the tails than the traditional Birnbaum-Saunders distribution, in addition to advancing the implementation of an expectation conditional maximization (ECM) algorithm. A Monte Carlo simulation study is performed to assess the behavior of the model as well as the parameter estimation method and to evaluate a form of residual. A real financial transaction data set is finally analyzed to illustrate the proposed approach.

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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
1Vilca, F., Santana, L., Leiva, V., and Balakrishnan, N (2011) Estimation of extreme percentiles in Birnbaum-Saunders distributions self1.00063100%
2Saulo, H., Leão, J., Leiva, V., and Aykroyd, R. G (2019) Birnbaum-Saunders autoregressive conditional duration models applied to high-frequency financial data self0.92844100%
3Bhatti, C (2010) The Birnbaum-Saunders autoregressive conditional duration model0.84333100%
4Bauwens, L., Galli, F., and Giot, P (2003) The moments of log-ACD models0.64441100%
5Balakrishnan, N. and Kundu, D (2019) Birnbaum-saunders distribution: A review of models, analysis, and applications self0.5112250%
6Bhogal, S. K. and Variyam Thekke, R (2019) Conditional duration models for high-frequency data: A review on recent developments0.51121100%
7Allen, D., Ng, K., and Peiris, S (2013) Estimating and simulating Weibull models of risk or price durations: An application to ACD models0.40511100%
8Davison, A. C (2008) Statistical Models0.40511100%
9Tse, Y.-k. and Yang, T. T (2012) Estimation of high-frequency volatility: An autoregressive conditional duration approach0.40511100%
10Azzalini, A. and Capitanio, A (2014) The Skew-Normal and Related Families0.40511100%

Showing the top 10 of 18 scored citations.