Stochastic volatility models assume that volatility follow a random process.In the emerging market the volatility tend to be high. why is it that the wishart stochastic volatility model fit well the emerging market
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$\begingroup$ Do you have a source for the statement that "the wishart stochastic volatility model fits well the emerging markets". $\endgroup$– nbbo2Jan 26, 2016 at 21:42
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Generally, the Wishart stochastic volatility model identifies the volatility of the asset as the trace of a Wishart process. Contrary to a classic multifactor Heston model, this model allows to add degrees of freedom with regard to the stochastic correlation. Thanks to its flexibility, this model enables a better fit of market data than the Heston model. Besides, the Wishart volatility model keeps a clear interpretation of its parameters and conserves an efficient tractability.It was showed that calibration of Wishart stochastic volatility model is easier than SV model.