Reviving Pseudo-Inverses for Large Dimensional Portfolio Selection

EI Seminar
Campus Woudestein, showcasing the flags of the School's and Institutes.

In this talk, we discuss high-dimensional asymptotic properties of the Moore-Penrose inverse and, as a byproduct, of various ridge-type inverses of the sample covariance matrix. In particular, the analytical expressions of the asymptotic behavior of the weighted sample trace moments of generalized inverse matrices are deduced in terms of the partial exponential Bell polynomials which can be easily computed in practice.

Speaker
Nestor Parolya
Date
Thursday 12 Mar 2026, 12:00 - 13:00
Type
Seminar
Room
ET-14
Location
Campus Woudestein
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The asymptotic results are obtained without assumption of normality and in the high-dimensional asymptotic regime. Our findings provide universal methodology for construction of fully data-driven improved shrinkage estimators of the precision matrix and optimal portfolio weights.

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More information

Do you want to know more about the event? Contact the secretariat Econometrics at eb-secr@ese.eur.nl.

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