>>1033023 >Its hard to grasp that random numbers can predict future prices accurately
But they can't anon, that's the whole deal with stochastic processes. You can sort of calculate the likely bounds based on a lot of possibly wrong assumptions, but the price movement of a single stock is impossible to predict. Unfortunately you can't put your money into the stock in all possible universes, so...
>>1033056 I mean, yeah. You have a regression function based on given data and then you just use Monte Carlo to create thousands of random subsets of your sample and then you analyze the results, right?
Maybe km completely off, does anyone have any resources which will enable me to learn more?
>>1033037 >I don't really see any applications in the field of economics.
One uses historical prices to predict the possibility of the future price. You run 1000 of them, each randomized but with a deviation given by historical info, where it hits the most you can say that according to hindsight, namely how it behaved, it is possible it will behave most probably like this.
But like I said, there are no future parameters, only historical values, and those are in my honest opinion irrelevant in predicting most of the stocks.
>>1032948 From Pedopedia: >/sci/: >Monte Carlo method, a class of computational algorithms >Monte Carlo integration, a method of numerical integration >Monte Carlo option model, an option valuation model using Monte Carlo methods >Monte Carlo algorithm, a randomized algorithm Gee, /biz/ is cool! Anyone who got degrees in both /biz/ and /sci/?
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