Related papers: Increasing countries financial resilience through …

A new framework for portfolio diversification is introduced which goes beyond the classical mean-variance approach and portfolio allocation strategies such as risk parity. It is based on a novel concept called portfolio dimensionality that…

Increasingly, there is well-grounded concern that through perpetual scaling-up of computation power and data, current deep learning techniques will create highly capable artificial intelligence that could pursue goals in a manner that is…

In this paper, making use of recent statistical physics techniques and models, we address the specific role of randomness in financial markets, both at the micro and the macro level. In particular, we review some recent results obtained…

Catastrophic losses caused by natural disasters receive a growing concern about the severe rise in magnitude and frequency. The constructions of insurance and financial management scheme become increasingly necessary to diversify the…

The failure of key financial institutions may accelerate risk contagion due to their interconnections within the system. In this paper, we propose a robust portfolio strategy to mitigate systemic risks during extreme events. We use the…

Some risks have extremely high stakes. For example, a worldwide pandemic or asteroid impact could potentially kill more than a billion people. Comfortingly, scientific calculations often put very low probabilities on the occurrence of such…

Decisions on how to manage future flood risks are frequently informed by both sophisticated and computationally expensive models. This complexity often limits the representation of uncertainties and the consideration of strategies. Here, we…

Climate resilience across sectors varies significantly in low-income countries (LICs), with agriculture being the most vulnerable to climate change. Existing studies typically focus on individual countries, offering limited insights into…

In the market place, diversification reduces risk and provides protection against extreme events by ensuring that one is not overly exposed to individual occurrences. We argue that diversification is best measured by characteristics of the…

Climate-related phenomena are increasingly affecting regions worldwide, manifesting as floods, water scarcity, and heat waves, significantly impairing companies' assets and productivity. It is essential for asset managers to quantify the…

This paper addresses decision-aiding problems that involve multiple objectives and uncertain states of the world. Inspired by the capability approach, we focus on cases where a policy maker chooses an act that, combined with a state of the…

Cascading failures, triggered by a local perturbation, can be catastrophic and cause irreparable damages in a wide area. Hence, blocking the devastating cascades is an important issue in real world networks. One of the ways to control the…

The cataclysmic contagion based calamity -- Covid-19 has shown us a clear need for a comprehensive community based strategy that overcomes the sheer complexity of controlling it and the caveats of current methods. In this regard, as seen in…

We propose a general CoVaR framework that extends the traditional CoVaR by incorporating diverse expert views and information, such as asset moment characteristics, quantile insights, and perspectives on the relative loss distribution…

In the current era of worldwide stock market interdependencies, the global financial village has become increasingly vulnerable to systemic collapse. The recent global financial crisis has highlighted the necessity of understanding and…

Eradicating extreme poverty and inequality are the key leverage points to achieve the seventeen Sustainable Development goals. Yet, the reduction in extreme poverty and inequality are vulnerable to shocks such as the pandemic and climate…

Natural disasters, such as tornadoes, floods, and wildfire pose risks to life and property, requiring the intervention of insurance corporations. One of the most visible consequences of changing climate is an increase in the intensity and…

The financial crisis has dramatically demonstrated that the traditional approach to apply univariate monetary risk measures to single institutions does not capture sufficiently the perilous systemic risk that is generated by the…

Carbon credits are a key component of most national and organizational climate strategies. Financing and delivering carbon credits from forest-related activities faces multiple risks at the project and asset levels. Financial mechanisms are…

Risk diversification is one of the dominant concerns for portfolio managers. Various portfolio constructions have been proposed to minimize the risk of the portfolio under some constrains including expected returns. We propose a portfolio…