Skew–Brownian processes for estimating the volatility of crude oil Brent

B-Tier
Journal: International Journal of Forecasting
Year: 2025
Volume: 41
Issue: 2
Pages: 763-780

Score contribution per author:

0.670 = (α=2.01 / 3 authors) × 1.0x B-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

To predict the volatility of crude oil Brent price, we propose a novel econometric model 11The numerical results presented in this manuscript were reproduced by the Editor-in-Chief on 30 June 2024. where the explanatory variables are a combination of macroeconomic variables (i.e. price pressure), trade data (freight shipment index), and market sentiment (gold volatility). The model is proposed in two alternative variants: first, we assume Gaussian distributed quantities; alternatively, we consider the potential presence of skewness and adopt a Skew–Brownian process. We show that the suggested approach outperforms the selected baseline model as well as other models proposed in the literature, especially when turbulent periods occur.

Technical Details

RePEc Handle
repec:eee:intfor:v:41:y:2025:i:2:p:763-780
Journal Field
Econometrics
Author Count
3
Added to Database
2026-01-25