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chenxi-bot21

risk-analytics-mcp-server

by chenxi-bot21

garch_volatility

Fit a GARCH(1,1) model to daily returns and forecast volatility days ahead, with mean reversion to long-run volatility.

Instructions

Fit GARCH(1,1) by maximum likelihood to a daily return series (>= 250 obs) and forecast volatility forecast_horizon days ahead (mean-reverting to long-run vol). Omit returns to use the demo portfolio.

Input Schema

TableJSON Schema
NameRequiredDescriptionDefault
returnsNo
forecast_horizonNo
Behavior5/5

Does the description disclose side effects, auth requirements, rate limits, or destructive behavior?

Discloses the model type (GARCH(1,1)), estimation method (MLE), data requirement, forecast behavior (mean-reverting), and demo option. No annotations provided, so description fully responsible; covers key behavioral aspects.

Agents need to know what a tool does to the world before calling it. Descriptions should go beyond structured annotations to explain consequences.

Conciseness5/5

Is the description appropriately sized, front-loaded, and free of redundancy?

Two sentences, front-loaded with main purpose, no redundant words. Every sentence adds value.

Shorter descriptions cost fewer tokens and are easier for agents to parse. Every sentence should earn its place.

Completeness4/5

Given the tool's complexity, does the description cover enough for an agent to succeed on first attempt?

Covers model, estimation, data requirements, and demo. Lacks explicit output format (though implied as volatility forecast). With no output schema, describing return format would improve completeness.

Complex tools with many parameters or behaviors need more documentation. Simple tools need less. This dimension scales expectations accordingly.

Parameters5/5

Does the description clarify parameter syntax, constraints, interactions, or defaults beyond what the schema provides?

Adds meaning beyond schema: explains `returns` as daily return series and optional demo, `forecast_horizon` as days ahead with default. Schema coverage is 0%, so description compensates effectively.

Input schemas describe structure but not intent. Descriptions should explain non-obvious parameter relationships and valid value ranges.

Purpose5/5

Does the description clearly state what the tool does and how it differs from similar tools?

Clearly states it fits GARCH(1,1) to daily returns and forecasts volatility, specifying data requirement and demo portfolio. Distinguishes from siblings like evt_tail_risk and compute_var_es.

Agents choose between tools based on descriptions. A clear purpose with a specific verb and resource helps agents select the right tool.

Usage Guidelines4/5

Does the description explain when to use this tool, when not to, or what alternatives exist?

Provides context on when to use (volatility forecasting) and data prerequisites (>=250 obs). Implicitly distinguishes from siblings, but lacks explicit when-not-to-use or alternative comparisons.

Agents often have multiple tools that could apply. Explicit usage guidance like "use X instead of Y when Z" prevents misuse.

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