Brownian motion of sol particles Brownian motion of sol particles Colloidal particles in a sol are continuously bombarded by the molecules of the dispersion medium on all sides. The impacts are however not equal in every direction. As a result, the sol particles show random or zig-zag movements. This random or zig-zag motion of the colloidal particles in a sol is called Brownian motion or Brownian movement. The phenomenon of Brownian motion was observed by Robert Brown in the form of random zig-zag motion of pollen grains suspended in water. This kind of movement is found in all colloidal systems. Such random motion is visible
Geometric Brownian motion above: formula_27. import numpy as np import pandas as pd import matplotlib.pyplot as plt mu=1 n=50 dt=0.1 x0=100 x=pd.DataFrame() np.random.seed(1) for sigma in np.arange(0.8,2,0.2): x.columns=np.arange(0.8,2,0.2) plt.plot(x) plt.legend(x.columns) plt.xlabel('t') plt.ylabel('X') plt.title('Realizations of Geometric Brownian Motion with different variances\n mu=1') plt.show() GBM can be extended to the case where there are multiple correlated price paths. Each price path follows the underlying process where the Wiener processes are correlated such that formula_31 where formula_32. For the multivariate case, this implies that Geometric Brownian motion is used to model stock prices in the Black–Scholes model and is the most widely used model of stock