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A non-parametric method for ranking stock indices according to their mutual causal influences is presented. Under the assumption that indices reflect the underlying economy of a country, such a ranking indicates which countries exert the…

Statistical Finance · Quantitative Finance 2018-01-23 Theo Diamandis , Yonathan Murin , Andrea Goldsmith

The dynamics of the equal-time cross-correlation matrix of multivariate financial time series is explored by examination of the eigenvalue spectrum over sliding time windows. Empirical results for the S&P 500 and the Dow Jones Euro Stoxx 50…

Statistical Finance · Quantitative Finance 2010-02-02 Thomas Conlon , Heather J. Ruskin , Martin Crane

Stock networks, constructed from stock price time series, are a well-established tool for the characterization of complex behavior in stock markets. Following Mantegna's seminal paper, the linear Pearson's correlation coefficient between…

Statistical Finance · Quantitative Finance 2018-06-27 David Hartman , Jaroslav Hlinka

Complex systems and relational data are often abstracted as dynamical processes on networks. To understand, predict and control their behavior, a crucial step is to extract reduced descriptions of such networks. Inspired by notions from…

Social and Information Networks · Computer Science 2019-06-26 Michael T. Schaub , Jean-Charles Delvenne , Renaud Lambiotte , Mauricio Barahona

Cross-correlation analysis is a powerful tool for understanding the mutual dynamics of time series. This study introduces a new method for predicting the future state of synchronization of the dynamics of two financial time series. To this…

Statistical Finance · Quantitative Finance 2022-11-03 Mostafa Shabani , Martin Magris , George Tzagkarakis , Juho Kanniainen , Alexandros Iosifidis

An average instantaneous cross-correlation function is introduced to quantify the interaction of the financial market of a specific time. Based on the daily data of the American and Chinese stock markets, memory effect of the average…

Statistical Finance · Quantitative Finance 2015-05-18 Tian Qiu , Guang Chen , Li-Xin Zhong , Xiao-Wei Lei

Lead/lag relationships are an important stylized fact at high frequency. Some assets follow the path of others with a small time lag. We provide indicators to measure this phenomenon using tick-by-tick data. Strongly asymmetric…

Trading and Market Microstructure · Quantitative Finance 2012-01-19 Nicolas Huth , Frédéric Abergel

We consider a few quantities that characterize trading on a stock market in a fixed time interval: logarithmic returns, volatility, trading activity (i.e., the number of transactions), and volume traded. We search for the power-law…

Statistical Finance · Quantitative Finance 2016-01-20 Rafal Rak , Stanislaw Drozdz , Jaroslaw Kwapien , Pawel Oswiecimka

We propose directed time series regression, a new approach to estimating parameters of time-series models for use in certainty equivalent model predictive control. The approach combines merits of least squares regression and empirical…

Machine Learning · Computer Science 2012-07-02 Yi-Hao Kao , Benjamin Van Roy

We follow the main stocks belonging to the New York Stock Exchange and to Nasdaq from 2003 to 2012, through years of normality and of crisis, and study the dynamics of networks built on two measures expressing relations between those…

Statistical Finance · Quantitative Finance 2014-09-02 Leonidas Sandoval Junior

We investigate the daily correlation present among market indices of stock exchanges located all over the world in the time period Jan 1996 - Jul 2009. We discover that the correlation among market indices presents both a fast and a slow…

Statistical Finance · Quantitative Finance 2011-08-16 Dong-Ming Song , Michele Tumminello , Wei-Xing Zhou , Rosario N. Mantegna

Time-varying networks describe a wide array of systems whose constituents and interactions evolve over time. They are defined by an ordered stream of interactions between nodes, yet they are often represented in terms of a sequence of…

Statistical Mechanics · Physics 2013-10-23 Bruno Ribeiro , Nicola Perra , Andrea Baronchelli

The relative timing of action potentials in neurons recorded from local cortical networks often shows a non-trivial dependence, which is then quantified by cross-correlation functions. Theoretical models emphasize that such spike train…

Neurons and Cognition · Quantitative Biology 2017-06-28 Taskin Deniz , Stefan Rotter

The presence of significant cross-correlations between the synchronous time evolution of a pair of equity returns is a well-known empirical fact. The Pearson correlation is commonly used to indicate the level of similarity in the price…

Statistical Finance · Quantitative Finance 2014-02-07 Dror Y. Kenett , Xuqing Huang , Irena Vodenska , Shlomo Havlin , H. Eugene Stanley

The measured correlations of financial time series in subsequent epochs change considerably as a function of time. When studying the whole correlation matrices, quasi-stationary patterns, referred to as market states, are seen by applying…

Statistical Finance · Quantitative Finance 2020-11-03 Anton J. Heckens , Sebastian M. Krause , Thomas Guhr

Trend change prediction in complex systems with a large number of noisy time series is a problem with many applications for real-world phenomena, with stock markets as a notoriously difficult to predict example of such systems. We approach…

Computational Finance · Quantitative Finance 2018-11-30 Ben Moews , J. Michael Herrmann , Gbenga Ibikunle

Cryptocurrencies return cross-predictability and technological similarity yield information on risk propagation and market segmentation. To investigate these effects, we build a time-varying network for cryptocurrencies, based on the…

Statistical Finance · Quantitative Finance 2021-08-27 Li Guo , Wolfgang Karl Härdle , Yubo Tao

Cryptocurrencies return cross-predictability and technological similarity yield information on risk propagation and market segmentation. To investigate these effects, we build a time-varying network for cryptocurrencies, based on the…

Methodology · Statistics 2022-11-18 Li Guo , Wolfgang Karl Härdle , Yubo Tao

We study the time dependence of maximal spanning trees and asset graphs based on correlation matrices of stock returns. In these networks the nodes represent companies and links are related to the correlation coefficients between them.…

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

We report evidence of a deep interplay between cross-correlations hierarchical properties and multifractality of New York Stock Exchange daily stock returns. The degree of multifractality displayed by different stocks is found to be…

Statistical Finance · Quantitative Finance 2014-04-10 Raffaello Morales , T. Di Matteo , Tomaso Aste