Re: Hull White Calibration

Posted by Klaus Spanderen-2 on
URL: http://quantlib.414.s1.nabble.com/Hull-White-Calibration-tp100p101.html

Hi Jonathan

hard to tell w/o your code. The last argument of SwaptionHelper's constructor
decides whether the calibration is carried out using

case RelativePriceError:
            error = std::fabs(marketValue() - modelValue())/marketValue();
            break;
case PriceError:
            error = marketValue() - modelValue();
            break;
case ImpliedVolError:
            ..
           error = implied - volatility_->value();

If you don't supply a CalibrationErrorType then the default
type "RelativePriceError" is used.

hope this helps,
 Klaus



On Monday 27 February 2012 23:31:28 Jonathan Budd wrote:

> I'm new to QuantLib, and recently put together some code to calibrate
> the Hull White model to swaption volatilities. Everything is working
> well, but I'm left wondering whether the calibration is performed on
> volatilities or prices. I've read through the code in the test suite
> and the source code for CalibrationHelper, and I'm almost sure that
> when calibrating the Hull White model to swaption volatilities, the
> CalibrationHelper minimises the distance between model and input
> volatilities, rather than prices. However, I'm yet to find a
> definitive answer (either in a comment or line of code).
>
> Can anyone confirm or deny that this is the case? Save for modifying
> the class, is there an easy way to set CalibrationHelper to calibrate
> either way?
>
> Best regards
>
>
> jb
>
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