today's stock market risk is stabilizing in a spooky way
New York, NY (PRWEB) September 19, 2011
By researching stock market Lithuanian mathematician at Vilnius University Dr. Algirdas Javtokas defines Stock Market Risk Index (further SMRI). According to the mathematician the SMRI can reflect the risk of the stock market more precisely. The SMRI as it is defined by Dr. A. Javtokas was not investigated by other researches or analysts.
Analyzing the SMRI trends Dr. Algirdas Javtokas describes today's market's risk as "struggling in the extremes of its limits. In the long run perspective the risk is going to normalize. It could be seen from the graphics and a closer analysis."
The absence of the universal risk index has motivated Dr. Algirdas Javtokas to revise all available indexes and indicators of the market's risk. Today one of the most popular risk indicators is called beta. The beta cannot measure the risk of the market as a whole.
Dr. Algirdas Javtokas purpose was to create the index which would reflect the risk of the market as a whole. For this purpose he introduces different indexes for U.S., Europe and Asia.
The SMRI is defined in the way to have a close relation with the main stock market's indexes like DOW in U.S.; FTSE 100, DAX and CAC 40 in Europe; NIKKEI 225 and Hang Seng in Asia.
The values of the SMRI begins at 0 and SMRI=0 means the market is risk free. The SMRI between 0 and 1 means the market is stable, and if SMRI is bigger than 1 - the market is becoming more and more risky.
The index helps investors to determine the risk of the market from different perspectives of time. It can be calculated for a particular period like a day, week, month or year. "It can reflect market's risk of the present minute or even a second" says Dr. Javtokas.
Dr. Algirdas Javtokas was born May 9, 1979 in Siauliai in Lithuania to a family of a doctor and an engineer. He has graduated from the Vilnius University with a B.Sc. in Physics. In 2004 he received a M.Sc. in Mathematics from the same university where, three years later he earned a Ph.D. in number theory. Recently Dr. Algirdas Javtokas holds a position at Vilnius University and teaches classes on statistics, number theory, algebra, financial mathematics and informatics.