Testing mean stationarity of intraday volatility curves

B-Tier
Journal: Quantitative Economics
Year: 2025
Volume: 16
Issue: 3
Pages: 1059-1091

Authors (4)

Torben G. Andersen (National Bureau of Economic Re...) Yingwen Tan (not in RePEc) Viktor Todorov (not in RePEc) Zhiyuan Zhang (not in RePEc)

Score contribution per author:

0.503 = (α=2.01 / 4 authors) × 1.0x B-tier

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

Abstract

We develop a test for mean stationarity of latent volatility curves using high‐frequency data. To derive the asymptotic test size and power, we establish a functional invariance principle for semimartingales under a strong mixing condition. The power properties are analyzed under alternatives featuring deterministic trends in the volatility curve dynamics. Application to S&P 500 futures data provides strong evidence of nonstationary variation in the volatility pattern, with implications for real‐time risk management and market activity measurement, including identification of spot volatility and the size of price jumps.

Technical Details

RePEc Handle
repec:wly:quante:v:16:y:2025:i:3:p:1059-1091
Journal Field
General
Author Count
4
Added to Database
2026-01-24