GARCH model

The GARCH model, which stands for Generalized Autoregressive Conditional Heteroskedasticity, is a statistical tool used to analyze and predict financial market volatility. It helps identify patterns in how the level of risk (or volatility) changes over time. GARCH models recognize that periods of high volatility (like market crashes) can be followed by more high volatility, and vice versa, rather than being consistent. By understanding these patterns, investors and analysts can better assess risks and make informed decisions about trading or investing based on potential price fluctuations.