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Banded Regularization of Autocovariance Matrices in Application to Parameter Estimation and Forecasting of Time Series

Banded Regularization of Autocovariance Matrices in Application to Parameter Estimation and Forecasting of Time Series

Summary The paper addresses a ā€˜large pā€“small nā€™ problem in a time series framework and considers properties of banded regularization of an empirical autocovariance matrix of a time series process. Utilizing the banded autocovariance matrix enables us to fit a much longer auto-regressive AR(p) model to the observed data than ā€¦