Stock Price Volatility Prediction Based on GARCH and Related Models

In the modern financial industry, the stock market is favored by most financial investors. Because of its high risk and high return, many people in society are willing to invest a lot of money in the stock industry to seek huge profits. Many factors affect the stock price trend, and a stock price has volatility and activity in the constantly fluctuating stock market. For the financial market, the appropriate volatility of stock prices is conducive to the stable development and safety of the financial market. Still, when unexpected risks appear, it may lead to drastic changes in stock prices. From the investor's point of view, the return on investment is always accompanied by risk, and how to predict the risk affecting the stock price fluctuation is the key to whether investors can make profits from stock investment. In this article, it will start with GARCH and review how other scholars use the GARCH model to predict the risk of stocks or other financial instruments.