![](https://www.tumblr.com/widgets/share/tool?posttype=photo&canonicalUrl=https%3A%2F%2Fcdnx.numxl.com%2Falbums%2Fen-16%2Fcontent%2Flocal-and-term-structure-volatility-using-garch-model%2F&content=https%3A%2F%2Fcdnx.numxl.com%2Fstorage%2Fcache%2Fimages%2F000%2F083%2Fforecast-garch-local-ts-plot%2Flarge.1598027263.png&caption=%3Cp%3E%3Cstrong%3E%3Ca href="https%3A%2F%2Fcdnx.numxl.com%2Falbums%2Fen-16%2Fcontent%2Flocal-and-term-structure-volatility-using-garch-model%2F" title="Plot for Local and term structure volatility forecast using GARCH model"%3EPlot for Local and term structure volatility forecast using GARCH model%3C/a%3E%3C/strong%3E%3C/p%3E%3Cp%3EIn+this+plot%2C+the+local+%28aka+forecast+error%29+and+term+structure+volatility+forecast+are+plotted+together.+Note+that+both+curve+converges+closer+as+time+goes+on%2C+and+they+both+revert+t+the+long-run+value+%28i.e.+VL%29%3C/p%3E){kind=link}
Plot for Local and term structure volatility forecast using GARCH model
In this plot, the local (aka forecast error) and term structure volatility forecast are plotted together. Note that both curve converges closer as time goes on, and they both revert t the long-run value (i.e. VL)