# Cox-Ingersoll-Ross Model

*Quant & Pricing — Finicade finance glossary*

The CIR model makes the short rate mean-reverting with volatility proportional to its square root, so the rate can approach zero but never go negative.

The CIR model makes the short rate mean-reverting with volatility proportional to the square root of the rate, so volatility shrinks as rates approach zero and the rate cannot go negative. That square-root diffusion is the same process Heston uses for variance. The Feller condition sets when the boundary at zero is genuinely unreachable, and it is routinely violated by real calibrations.

**Also known as:** CIR model, CIR, square root process

**Related terms:** [Vasicek Model](https://finicade.com/glossary/vasicek-model), [Mean Reversion](https://finicade.com/glossary/mean-reversion), [Heston Model](https://finicade.com/glossary/heston-model), [Stochastic Process](https://finicade.com/glossary/stochastic-process), [Yield Curve](https://finicade.com/glossary/yield-curve)

Source: https://finicade.com/glossary/cox-ingersoll-ross-model