This is throwing me for a loop. in regards to this passage, does the M^L represent to perform this sum over every "overlapping window" individually? Would this mean "M symbols" are the unique symbols to that specific window?
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- 5$\begingroup$ I’m voting to close this question because this question does not belong to quant SE. $\endgroup$Kermittfrog– Kermittfrog2022-02-07 09:37:17 +00:00Commented Feb 7, 2022 at 9:37
- 1$\begingroup$ @Kermittfrog The original article is exploring entropy evolution of foreign exchange rates during financial crises (here is a link). I can understand the confusion, since this is not visible in the above picture. Hence, the question is about a statistical methodology which is used within the area of finance. I think this needs to be considered before closing the question :-). $\endgroup$Pleb– Pleb2022-02-07 10:05:40 +00:00Commented Feb 7, 2022 at 10:05
- 2$\begingroup$ My first take of how it works (needs to be checked and corrected by careful reading and re-reading of the article).The exchange rates are "quantized" into discrete ranges and encoded into symbols (EURUSD between 1.0 and 1.1 is "F", between 1.1 and 1.2 "G", etc.). Over a specific time frame (december 12 2021 to december ... 2021) the evolution of the exchange rate produces a "word" such as "FGFEFEGF" and this word contains a sequence of length L=8 symbols and contains M=3 distinct symbols namely E,F,G. As time moves on, we drop the oldest (leftmost) symbol and add a new symbol on the right. $\endgroup$nbbo2– nbbo22022-02-07 10:50:29 +00:00Commented Feb 7, 2022 at 10:50
- $\begingroup$ Could you rephrase the final paragraph, your first phrase is not quite clear. $\endgroup$Bob Jansen– Bob Jansen ♦2022-02-07 12:58:23 +00:00Commented Feb 7, 2022 at 12:58
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