Autoregressive Conditional Heteroskedasticity

Autoregressive Conditional Heteroskedasticity - An autoregressive conditional heteroskedasticity, also known as ARCH, a model in econometrics used to analyze and to predict the volatility, which is the rate relative to which the price of a security moves down or up on a daily basis. These volatile fluctuations tend to appear in clusters when viewing them over time. These calculations include the historical data of a cluster, and then use them to calculate the future volatility by looking at probability distributions related to a variable like price. This lends some predictability to trends that occur in clusters.