Modeling and forecasting realized portfolio weights

B-Tier
Journal: Journal of Banking & Finance
Year: 2022
Volume: 138
Issue: C

Authors (2)

Golosnoy, Vasyl (Ruhr-Universität Bochum) Gribisch, Bastian (not in RePEc)

Score contribution per author:

1.009 = (α=2.02 / 2 authors) × 1.0x B-tier

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

Abstract

We propose direct multiple time series models for predicting high dimensional vectors of observable realized global minimum variance portfolio (GMVP) weights computed based on high-frequency intraday returns. We apply Lasso regression techniques, develop a class of multiple AR(FI)MA models for realized GMVP weights, suggest suitable model restrictions, propose M-type estimators and derive the statistical properties of these estimators. In the empirical analysis for portfolios of 225 stocks from the S&P 500 we find that our direct models effectively minimize either statistical or economic forecasting losses both in- and out-of-sample as compared to relevant alternative approaches.

Technical Details

RePEc Handle
repec:eee:jbfina:v:138:y:2022:i:c:s0378426622000048
Journal Field
Finance
Author Count
2
Added to Database
2026-01-25