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Persistent link: https://www.econbiz.de/10011686768
This paper considers a stochastic control problem derived from a model for pairs trading under incomplete information. We decompose an individual asset's drift into two parts: an industry drift plus some additional stochasticity. The extra stochasticity may be unobserved, which means the...
Persistent link: https://www.econbiz.de/10012969555