Financial Econometrics: Analyzing the Behaviour of Financial Markets and Assets Using Econometric Techniques

Dr Rajendra Singh , Neelam Singh

Volume 4, Issue 2 2020

Page: 29-36

Abstract

The complex behaviour of financial markets and assets may be better understood by the application of econometric tools, which are the focus of financial econometrics. Situated at the crossroads of economics, statistics, and finance, this field models and evaluates the intricate linkages that control financial variables through the use of quantitative approaches. The main objective is to discover the hidden dynamics and patterns in financial data so that we may better understand asset pricing, market movements, and risk factors. The links between different financial variables are quantified and interpreted using econometric methods including regression analysis, time series analysis, and volatility modelling. Financial econometrics is driven by the goal of improving our understanding of market movements, developing successful investment strategies, and providing credible risk assessments via the use of rigorous statistical methods. By providing a methodical framework for comprehending and forecasting the actions of financial markets and assets, this area significantly influences financial decision-making.

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