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This paper uses topological data analysis (TDA) tools and introduces a data-driven clustering-based stock selection strategy tailored for sparse portfolio construction. Our asset selection strategy exploits the topological features of stock…

Portfolio Management · Quantitative Finance 2024-12-16 Anubha Goel , Damir Filipović , Puneet Pasricha

Methods connecting dynamical systems and graph theory have attracted increasing interest in the past few years, with applications ranging from a detailed comparison of different kinds of dynamics to the characterisation of empirical data.…

Statistical Mechanics · Physics 2018-01-18 Marcello A. Budroni , Andrea Baronchelli , Romualdo Pastor-Satorras

A pairwise clustering approach is applied to the analysis of the Dow Jones index companies, in order to identify similar temporal behavior of the traded stock prices. To this end, the chaotic map clustering algorithm is used, where a map is…

Disordered Systems and Neural Networks · Physics 2010-01-31 N. Basalto , R. Bellotti , F. De Carlo , P. Facchi , S. Pascazio

Scale invariance, collective behaviours and structural reorganization are crucial for portfolio management (portfolio composition, hedging, alternative definition of risk, etc.). This lack of any characteristic scale and such elaborated…

Statistical Finance · Quantitative Finance 2014-03-24 Thomas Bury

--- the companies populating a Stock market, along with their connections, can be effectively modeled through a directed network, where the nodes represent the companies, and the links indicate the ownership. This paper deals with this…

Statistical Finance · Quantitative Finance 2018-07-26 Roy Cerqueti , Giulia Rotundo , Marcel Ausloos

Recent evidence indicates that the abundance of recurring elementary interaction patterns in complex networks, often called subgraphs or motifs, carry significant information about their function and overall organization. Yet, the…

Disordered Systems and Neural Networks · Physics 2009-11-10 A. Vazquez , R. Dobrin , D. Sergi , J. -P. Eckmann , Z. N. Oltvai , A. -L. Barabasi

We investigate the properties of correlation based networks originating from economic complex systems, such as the network of stocks traded at the New York Stock Exchange (NYSE). The weaker links (low correlation) of the system are found to…

Statistical Finance · Quantitative Finance 2008-12-02 Antonios Garas , Panos Argyrakis , Shlomo Havlin

The correlation matrix formalism is used to study temporal aspects of the stock market evolution. This formalism allows to decompose the financial dynamics into noise as well as into some coherent repeatable intraday structures. The present…

Soft Condensed Matter · Physics 2009-11-07 J. Kwapien , S. Drozdz , F. Gruemmer , F. Ruf , J. Speth

We propose a generalized stochastic block model to explore the mesoscopic structures in signed networks by grouping vertices that exhibit similar positive and negative connection profiles into the same cluster. In this model, the group…

Social and Information Networks · Computer Science 2015-06-17 Jonathan Q. Jiang

Revealing the structural features of a complex system from the observed collective dynamics is a fundamental problem in network science. In order to compute the various topological descriptors commonly used to characterize the structure of…

Data Analysis, Statistics and Probability · Physics 2021-02-16 Sebastian Raimondo , Manlio De Domenico

We study the relationship between topological scales and dynamic time scales in complex networks. The analysis is based on the full dynamics towards synchronization of a system of coupled oscillators. In the synchronization process, modular…

Disordered Systems and Neural Networks · Physics 2009-11-11 Alex Arenas , Albert Diaz-Guilera , Conrad J. Perez-Vicente

Community structures have been identified in various complex real-world networks, for example, communication, information, internet and shareholder networks. The scaling of community size distribution indicates the heterogeneity in the…

Physics and Society · Physics 2022-07-11 Qing Yao , Bingsheng Chen , Tim S. Evans , Kim Christensen

A simple and elegant arrangement of stock components of a portfolio (market index-DJIA) in a recent paper [1], has led to the construction of crossing of stocks diagram. The crossing stocks method revealed hidden remarkable algebraic and…

Statistical Finance · Quantitative Finance 2014-06-12 Ovidiu Racorean

In complex financial systems, the sector structure and volatility clustering are respectively important features of the spatial and temporal correlations. However, the microscopic generation mechanism of the sector structure is not yet…

General Finance · Quantitative Finance 2015-04-09 Jun-Jie Chen , Lei Tan , Bo Zheng

Large datasets with interactions between objects are common to numerous scientific fields (i.e. social science, internet, biology...). The interactions naturally define a graph and a common way to explore or summarize such dataset is graph…

Applications · Statistics 2009-10-13 Hugo Zanghi , Stevenn Volant , Christophe Ambroise

Two distinct structures of aggregates of atoms connected by anisotropic bonds with a network configuration are discussed from the viewpoint of a point set topology. A specific topological space connects the two types of topological…

Mathematical Physics · Physics 2017-08-10 Shousuke Ohmori , Tomoyuki Yamamoto , Akihiko Kitada

A complex network is said to show topological isotropy if the topological structure around a particular node looks the same in all directions of the whole network. Topologically anisotropic networks are those where the local neighborhood…

Statistical Mechanics · Physics 2013-04-02 Ernesto Estrada

Complex numbers define the relationship between entities in many situations. A canonical example would be the off-diagonal terms in a Hamiltonian matrix in quantum physics. Recent years have seen an increasing interest to extend the tools…

Social and Information Networks · Computer Science 2023-07-06 Yu Tian , Renaud Lambiotte

Correlation matrices inferred from stock return time series contain information on the behaviour of the market, especially on clusters of highly correlating stocks. Here we study a subset of New York Stock Exchange (NYSE) traded stocks and…

Physics and Society · Physics 2009-11-13 Tapio Heimo , Jari Saramaki , Jukka-Pekka Onnela , Kimmo Kaski

As a typical representation of complex networks studied relatively thoroughly, financial market presents some special details, such as its nonconservation and opinions spreading. In this model, agents congregate to form some clusters, which…

Other Condensed Matter · Physics 2007-05-23 Jie Wang , Chun-Xia Yang , Pei-Ling Zhou , Ying-Di Jin , Tao Zhou , Bing-Hong Wang