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The Geometry of Memory: How the Solution to a Notorious Random Walk Problem Redefines Market Alpha
For decades, the "Random Walk" has been the bedrock of financial modeling, underpinning everything from the Black-Scholes equation to the Efficient Market Hypothesis (EMH). However, a persistent open problem in mathematics has clouded our understanding of stochastic processes: Why do some random walks revert to the mean (forgetting their history), while others diverge indefinitely (remembering their path)?
Bryan Downing
5 hours ago8 min read
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