In Finance, What is a Random Walk?
Random walks are also called random walks. Random walks, etc., are based on past performance and cannot predict future development steps and directions. The core concept is that the conserved quantity carried by any irregular walker corresponds to a diffusion transport law, which is close to the Brownian motion, which is the ideal mathematical state of the Brownian motion. At this stage, it is mainly used in Internet link analysis and financial stock markets.
- English: random walk
- Irregular walking and the law of diffusion
- When Internet users go online, they often have similar network behaviors: enter a web address, browse a page, and then follow the links on the page to continuously open new web pages. The random walk model is an abstract conceptual model for the behavior of users who browse the web. The reason for this abstract conceptual model is that many link analysis algorithms, including PageRank, are based on random walk models.
- In the initial stage, the user opens the browser to browse the first webpage. Suppose we have a virtual clock for timing. At this time, the time can be set to 1. After reading the webpage, the user feels about the page pointed to by a link in the webpage. Interest, so click the link to enter the second page, at this time the virtual clock counts again, the clock goes to word 2, if the page contains k out-links, the probability that the user jumps from the current page to the page pointed to by any link Are equal.
- Users continue to repeat the above process, jumping between pages pointed to by each other. If the user is not interested in continuing to browse all the links contained in a page, he may enter another URL in the browser and go directly to the webpage. This behavior is called teleporting. Assuming that there are m pages in the Internet, the probability of a user jumping to any page remotely is also equal, which is 1 / m. The random walk model is a conceptual model that abstracts the browsing behavior of two kinds of users: direct jump and remote jump. [4]