Beyond Forecasting: Recasting Volatility Control as a Routing Problem
Volatility control converts risk estimates into portfolio exposure, yet existing approaches often rely on a fixed volatility estimator or a pre-defined control rule that may not adapt to changing market conditions. We propose VolRouter, a modular framework that formulates volatility control as state-conditioned routing over estimator-controller pairs. VolRouter first summarizes market conditions into a control-relevant state profile and then performs routing through three stages: state inference, switch review, and pair selection. The Router can be implemented using rule-based, learnable, or LLM-based decision modules, while portfolio actions remain generated by predefined control policie...
| Authors | Hongji Pu, Leyang Zhou |
|---|---|
| Primary category | cs.CE |
| Published | 11 August 2026 |
| Last updated at source | 25 September 2026 |
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