Bond Pricing

Disclaimer: While my knowledge in the field of financial instruments was initially limited, my role as a data science lead for a company that developed a bond trading platform exposed me to these concepts. This exposure allowed me to build viable models, although some of the statements below may not align with the perspectives of those with more experience in trading. I kindly ask you to overlook these discrepancies and focus solely on the data science ideas.

Bonds, as financial instruments, are often characterized by periods of low trading activity interspersed with brief spikes of heightened interest. During these periods of hype, both the number of transactions and their volumes surge, only to be followed by extended periods of relative inactivity. Moreover, there exists a notable correlation between the pricing of bonds among companies within the same supply chain. This implies that shifts in the financial standing of one company can have a cascading effect on the bond prices of others in the supply chain.

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On the US market alone, the number of different bonds traded at some point in time is in the rage of tens of thousands, ensuring a large number of