V. Technical Methods and Interpolations · 11. septembre 2023

Understanding Fractional Differentiation: Think of it as measuring temperature now vs. its trend over time. In finance: 1. Asset Price Models: Traditional views vs. Fractional differentiation's long-term memory, e.g., Fractional Brownian Motion. 2. Risk Management: Models like VaR become more accurate. 3. Options Pricing: Enhanced with past price trends. 4. Interest Rates: Captures past rate shifts, refining models. It bridges current data with past patterns, vital in quantitative finance.