Studies on Risks Predication of the Internet Financial Investment Basing on GARCH-VaR Model.

With the development of science and technology, the Internet financing has gradually come into people's lives, particularly the Internet-based financial products led by Yuebao have rapidly seized the investment market, and the risks therein deserve our consideration. By introducing the GARCH-VaR model, this paper has discussed the GARCH type of model and the calculation method of VaR, and on the basis of that the risks predication on the investment of Internet financial products has been analyzed. Furthermore, this paper has taken the thousands of earnings of Yuebao from its launching in May 2013 to present as the sample and then combined other Internet financial products to study the volatility of their earnings and to evaluate their investment risks. Therefore, it will provide effective reference for people's future Internet finance investments to avoid the unnecessary risks. In view of the relevant previous researches, it can be found that the GARCH-VaR model can describe the volatility of returns series and the market risks of the current Internet financial products are still under control because of their low volatility. In addition, the investors can choose appropriate indexes to evaluate the risks of those Internet financial products in accordance with their own risk appetite and goals, and the evaluation index basing on VaR has much more referential meaning than the traditional Sharpe ratio. [ABSTRACT FROM AUTHOR]