Variance percentage transformation

[MartinFalch]

Hi there,

We are currently working with GARCH models and have been calculating a series of forecasts of the conditional variance. These lie in the region of 0.0003, 0.0001 etc.
At the same time, these are to be compared with some realized variance measures, which we've been given by our teacher. However, these realized variance range up to 300. In order to get the scale right, we were told that this was due to the realized variance being in percent.

Thus our question is: if we are to revert the realized variance to the right scale, which of the following should we do:

1) Divide the realized variance by 10,000?
2) Divide the realized variance by 100 (for percent), then squaring the resulting number?
3) Something else?

If anyone knows, we'd be happy to hear!

Best regards,

Martin