Economics Trading
How are matrices used in program trading (economics)?
Can someone give me a website that can explain this?
I already tried searching but couldn’t find a website.
If you don’t know a website then maybe a brief explanation would also help.
Thank you
Most parametric statistical modeling uses matrix math because the representation is far simpler and with the right algorithms, more efficient, particularly if you have a sparse matrix. For example, B=(X’X)^(-1)X’Y, where B is the coefficients of regression in OLS. When you get to things like GLS the form gets more complicated.
Matrix math is simply the easiest way to handle large numbers of variables. It takes the decision making out of contingent choices by making them regression style choices.
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