Abstract: Shocks and jumps of different funds' functions bring extreme negative values of great consequences to investors. There is always a factor of uncertainty in any economic situation, and in order to make the right investment decisions, or to choose the right business strategy, we require some form of workable hypothesis (that takes into account uncertainty and randomness) to base our decisions upon. Although both risk and upward potential are related to uncertainty of future events, risks usually play a more dominant role in investment decisions since investors are risk averse. At most cases detection of risk is one of the most important parts of a financial analysis. This article will examine ways to measure and manage risk in making investment decisions. Here we determine Brownian motion as the estimation method of the investment risks and show the specific features of the given method during the statistic data analyses.

Keywords: Brownian motion, risk, function, financial analysis, investment market, non-recurrent cycles, deviations, noises, inaccuracies, strategy, knowledge, the Hurst analyses, correlation, entropy.

ACM Classification Keywords: G.3 Probability and statistics - Stochastic processes

Link:

RISK IDENTIFICATION ANALYSIS OF STATISTIC DATA FOR BUILDING THE INVESTMENT FORECAST WITH THE HELP OF BROWNIAN MOTION MODEL

Kyzemin Oleksandr, Irina Gurina

http://www.foibg.com/ijita/vol19/ijita19-2-p09.pdf