TESTING FOR A CHANGE IN CORRELATION AT AN UNKNOWN POINT IN TIME USING AN EXTENDED FUNCTIONAL DELTA METHOD

B-Tier
Journal: Econometric Theory
Year: 2012
Volume: 28
Issue: 3
Pages: 570-589

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

We propose a new test against a change in correlation at an unknown point in time based on cumulated sums of empirical correlations. The test does not require that inputs are independent and identically distributed under the null. We derive its limiting null distribution using a new functional delta method argument, provide a formula for its local power for particular types of structural changes, give some Monte Carlo evidence on its finite-sample behavior, and apply it to recent stock returns.

Technical Details

RePEc Handle
repec:cup:etheor:v:28:y:2012:i:03:p:570-589_00
Journal Field
Econometrics
Author Count
3
Added to Database
2026-01-25