- Joined
- 9/17/19
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This is my usual way of creating stock simulations
View attachment 33716
But then what confuses me is that when I run simulations using python using the code below
View attachment 33717
mu and sigma extracted for the simple returns are almost always closer to the values I have set.
mu = 0.001
sigma = 0.05
(to give you a brief explanation of the code - I have simulated 100000 paths with 10 steps
for each simulation I store in list - mean of log returns, simple returns and sample standard deviation of log returns, simple returns.
Then after 100000 simulations, I calculated their average)
What am I getting wrong here?
Thank you in advance for your thoughts!
View attachment 33716
But then what confuses me is that when I run simulations using python using the code below
View attachment 33717
mu and sigma extracted for the simple returns are almost always closer to the values I have set.
mu = 0.001
sigma = 0.05
(to give you a brief explanation of the code - I have simulated 100000 paths with 10 steps
for each simulation I store in list - mean of log returns, simple returns and sample standard deviation of log returns, simple returns.
Then after 100000 simulations, I calculated their average)
What am I getting wrong here?
Thank you in advance for your thoughts!
Last edited: