Volatility in Prediction Markets: A Structural Approach
A 2026 paper by Xi and co-authors on prediction markets in prediction markets, using classical time-series methods: the abstract mentions an out-of-sample test and leaves out a benchmark, transaction costs, multiple testing and the size of the universe.
“Using a large panel of Kalshi contracts, we show that these structural variables carry substantial forecasting power.”
AssetPrediction markets
StrategyPrediction marketsmarket making
TechniqueClassical time series
InputsText and news
Also stated: out-of-sample test
Missing from abstract: benchmark, costs, multiple testing, universe
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The paper's neighbourhoodPrediction markets by year
FamilyPrediction markets7Momentum and trend following289Factor investing240Machine learning return prediction15318 more · 995
AuthorsXi et al.1
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