stochastics
Random process mathematics
Stochastics is a branch of mathematics dealing with random processes and probability—systems where outcomes are not fully predictable.
The term appears most often in finance, where stochastic models analyze market behavior and a stochastic oscillator is a momentum indicator comparing closing prices to price ranges: The stochastics suggest the stock is overbought.
Acts of parceling out
- expectationBelief about future outcomes
- varianceSpread around the mean
- likelihoodChance something will occur
- uncertaintyState of being unsure
chance · odds · risk · outcome · conditional · independent · binomial · Bernoulli
Cannot be anticipated
- aleatoryGoverned by chance
- indeterminateNot exactly known
- noiseUnwanted auditory disturbance
- entropyQuantified chaos in systems
chaos · fluctuation · perturbation · variability · dispersion · irregularity · non-deterministic
Imitation of real processes
- estimationApproximate value judgment
- regressionReturn to former state
- optimizationMaximizing efficiency or performance
- inferenceConclusion reached through reasoning
bootstrap · time-series · forecasting · nonparametric · resampling
Available courses of action
- volatilityRapid, unpredictable changeability
- hedgingNoncommittal maneuvering
- GreeksNatives of Athens' homeland
- arbitrageExploiting price discrepancies
Straps controlling horse's head
- stationaryNot in motion
- diffusionPassive molecular spreading
- filtrationSeparating solids from liquids
distributions
Acts of parceling out
- expectationBelief about future outcomes
- varianceSpread around the mean
- likelihoodChance something will occur
uncertainty · chance · odds · risk · outcome · conditional · independent · binomial · Bernoulli · exponential
unpredictable
Cannot be anticipated
- aleatoryGoverned by chance
- indeterminateNot exactly known
- noiseUnwanted auditory disturbance
entropy · chaos · fluctuation · perturbation · variability · dispersion · irregularity · non-deterministic
simulation
Imitation of real processes
- estimationApproximate value judgment
- regressionReturn to former state
- optimizationMaximizing efficiency or performance
inference · bootstrap · time-series · forecasting · nonparametric · resampling
options
Available courses of action
- volatilityRapid, unpredictable changeability
- hedgingNoncommittal maneuvering
- GreeksNatives of Athens' homeland
martingales
Straps controlling horse's head
- stationaryNot in motion
- diffusionPassive molecular spreading
- filtrationSeparating solids from liquids
stochasticsdeterminism
Doctrine of causal necessity
Newtonian mechanics · causality · predictability · certainty · classical mechanics