Is it possible to run Sharpe s Index, Value at Risk ( historical model or minte carlo model) and Monte carlo simulation simultaneously on the same data set to get a detailed understanding on the same data set of 5 year performance of individual banks vs Bank nifty Index towards understanding the performance?
Literature support is there for individual studies, but is it feasible to look at the same in a combined manner?
Can you let me know your suggestions on this?
If it for real time retail investors on where to invest, will it be feasible to checkout from multiple dimensions with these models?
Expecting your insights.
Hi! Alan. Yes, but with caution, because combining multiple finance models in a single research project is doable and helpful if the research objectives, data compatibility, and model assumptions are carefully considered. However, epistemological issues must be addressed.
1. Need to ensure each model's data is compatible and integrates well. Different models have different data needs, and if the data is not directly comparable or matched, the findings may be inaccurate or biased.
2. No model is developed without assumptions. The models' assumptions' compatibility must be thoroughly assessed. Conflicting outcomes or interpretations may result from mismatched assumptions.
3. Combining models can produce complex outcomes that are hard to understand and express. To gain relevant insights techniques and results must be clearly explained.
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