Dear all,
I want to know that when we are studying financial stock market then we are confronted with conditional volatility and unconditional volatility terms many times, but what is actually these terms are referring? what is the means of these two terms?
whether these two terms are the volatility types?
why we have to model the volatility?
what ultimately we get by modelling volatility--only capture volatility characteristics or we get any recommendation in form of outcomes of these models, like this is suggested that is suggested for the market now on the basis of outcomes of these models?
Volatility is not ocnstant, it keeps changing over time.
Unconditional volatility usually refer to a long-term average volatility.
Conditional volatility usually refers to a volatility at a particular moment (e.g. day or week).
You may find Useful information in this article
"Modeling the Symmetric and Asymmetric Volatility for Select Stock Futures in India: Evidence from GARCH Family Models" by K Srinivasan in 2013
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