Matroid Evolved: Research

We study financial market contagion by applying the volatility index and the correlation between global markets. The first discovery is that it is difficult for any foreign economic crisis to spread to the US equity market. US market may be slightly affected and drops 1%-5%. However, when this event happens, it is usually a good buyback opportunity. Another discovery is that when there is an economic crisis in the US, the fear must spread to all global markets. In US financial crises, it often said, “all correlations go to 1.” Francois Longin and Bruno Solnik (2001) used “extreme value theory” to derive the distribution of extreme correlation between US, European, and Asian stock markets. They found that the S&P 500 seemed to lead the other two markets in terms of extreme positive or negative returns. Therefore, investing in other equity markets during the US financial crisis doesn’t reduce losses. Data: 1997 Asian financial crisis 1998 Russian financial crisis 1999 Argentina econo...

What is the Chicago Fed National Activity Index (CFNAI)? Many people use unemployment rate% to measure the US economy. The correlation between unemployment rate% and GDP growth is always negative. However, many people now realize that it is wrong. Unemployment rate% has not been a good predictor since 2008. There was a precaution telling you that the unemployment rate% cannot accurately measure the economy in the past. Using CFNAI to measure the economy is better than using the unemployment rate%. The CFNAI is a weighted average of 85 existing monthly indicators of national economic activity. It is constructed to have an average value of zero and a standard deviation of one. Since economic activity tends toward trend growth rate over time, a positive index reading corresponds to growth above trend and a negative index reading corresponds to growth below trend. The 85 economic indicators that are included in the CFNAI are drawn from four broad categories of data: production and income; ...

Many people believe in the reason why the market value of all share listed in NYSE fell by 30% is that there was an economic bubble and the stock market is irrational. However, is that the truth? We are going to show you three different approaches to the 1929 market crash. Remember that correlation is not causation. These are just references. Approaches: 1. There was no economic bubble before the 1929 market crash. Irving Fisher, a famous US economist said: “prices of stocks are low.” Fisher based his projection on strong earnings reports, fewer industrial disputes, and evidence of high investment in R&D and other intangible capital. 2. There was insider trading. In the months prior to the stock market crash of 1929, the price of a seat on the NYSE was abnormally low. Rising stock prices and volume should have driven up seat prices during the boom of 1929; instead, there were negative cumulative abnormal returns to seats of approximately 20% in the months before the market crash. A...

https://www.wsj.com/articles/hong-kong-protesters-taunt-beijing-in-bid-to-spoil-communist-chinas-birthday-11569845686 Since the Hong Kong protest began, Hong Kong has suffered a human rights issue. Some Hong Kongers were killed, a female teenager claimed that she was raped, numerous protestors were unfairly treated after they were caught, but none of the police officers have been punished so far. Since I was born, I knew there was a human rights issue in this world, but I didn't realize that was a serious problem and how horrible it was until I  witnessed this issue happening in Hong Kong. When I was 16, I was deeply immersed in financial trading. I was focusing on finding patterns, learning how to make money through trading, and seldom caring for other people. Some readers who are now reading this article may be similar to me. Probably, you want to change your destiny by making more money. I don't think it is wrong because I do it too. However, apart from making money, I thin...