Re: Hull White Calibration

Posted by Jonathan Budd on
URL: http://quantlib.414.s1.nabble.com/Hull-White-Calibration-tp100p102.html

Thanks Klaus, that answers my question. I should've read
CalibrationHelper.cpp more than once.

On Tue, Feb 28, 2012 at 10:24 AM, Klaus Spanderen <[hidden email]> wrote:

> 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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