Stochastic modeling(redirected from stochastic model)
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Related to stochastic model: deterministic model
Stochastic modeling is a statistical process that uses probability and random variables to predict a range of probable investment performances.
The mathematical principles behind stochastic modeling are complex, so it's not something you can do on your own.
But based on information you provide about your age, investments, and risk tolerance, financial analysts may use stochastic modeling to help you evaluate the probability that your current investment portfolio will allow you to meet your financial goals.
Appropriately enough, the term stochastic comes from the Greek word meaning "skillful in aiming."