Using fundamentals of Chaos theory and scaling Behaviour in studying financial data

Abstract

Abstract This work focuses on applying the concepts of Chaos Theory and Nonlinear Dynamics to analyze financial data. The report starts with a brief treatise on the basic concepts of Chaos Theory, Nonlinear Dynamics and Fragmentary. Previous attempts reported in literature to apply these concepts to studying financial markets have also been documented . Building on these concepts various statistical tools have been applied to study the presence of chaos and scaling behavior in High frequency time series for the Nifty Index . A statistical study has been done for high frequency stock price time series in order to test the nature of the underlying probability distribution of these returns and test the presence of scaling.