Navigation Links
Plants and animals under stress may provide the key to better stock market predictions
Date:11/3/2010

Stock markets react to crisis in a similar way to plants and the human body, according to a major new study that may help to predict future financial down-turns.

An extensive analysis of biological and financial data suggests that systems under stress exhibit similar symptoms, whether they be polluted forests, cancer patients or the FTSE 100.

There is an uncanny parallel between the way that humans, animals and plants adapt to harsh living conditions and the behaviour under stress of stock market prices and the banking sector, according to a report on the study by a team of academics led by Alexander Gorban, a Professor of Applied Mathematics at the University of Leicester, and including Tatiana Tyukina from the University of Leicester and Professor Elena Smirnova from the Siberian Federal University, Russia.

Warning signs may be detected -- even before obvious symptoms occur -- by charting the interdependence and volatility of key factors, the report claims.

The team has named this "order in chaos" theory the "Anna Karenina Principle", after Leo Tolstoy's turbulent novel which opens with the words: "Happy families are all alike; every unhappy family is unhappy in its own way." Professor Gorban explains that people, plants or stock markets function in a similar way until things go wrong at which point they start to react in different ways.

Studying how systems facing stress react in terms of becoming more interdependent and volatile reveals patterns that help to predict when a crisis may occur and the likelihood of death or recovery, he says. A key finding is that as the crisis approaches, systems become more dependent on each other but at the same time more likely to react differently.

A study of Scots pine trees near a power station showed that though the average compositions of the needles was similar to those outside the polluted area, the variance and interdependence of individual components were far greater.

The team also looked at human physiology including the way healthy people adapted to a change in climate conditions and the clinical signs accompanying fatal outcomes in cancer and cardiology clinics.

The report says stocks and shares showed a similar pattern during the financial crisis of mid 2008. Stocks became more interdependent and volatile as the FTSE100 decreased but by the end of the year the system became less connected and even more volatile, suggesting a crash as the financial systems failed to adapt to the changed circumstances of the market.


'/>"/>

Contact: Professor Alexander Gorban
ag153@le.ac.uk
University of Leicester
Source:Eurekalert

Related biology news :

1. Commercial aquatic plants offer cost-effective method for treating wastewater
2. UC Riverside biochemists devise method for bypassing aluminum toxicity effects in plants
3. Reproducing early and often is the key to rapid evolution in plants
4. MSU scientists find new gene that helps plants beat the heat
5. Researchers design artificial cells that could power medical implants
6. When under attack, plants can signal microbial friends for help
7. Current mass extinction spurs major study of which plants to save
8. Scientists unveil mechanism for up and down in plants
9. New hybrid plants could prompt more prodigious pepper production in Southwest
10. Extreme weather postpones the flowering time of plants
11. Even plants benefit from outsourcing
Post Your Comments:
*Name:
*Comment:
*Email:
(Date:6/9/2016)... , June 9, 2016  Perkotek an innovation leader in attendance control systems ... seamlessly log work hours, for employers to make sure the right employees are actually ... http://photos.prnewswire.com/prnh/20160609/377486LOGO ... ... ...
(Date:6/3/2016)... , June 3, 2016 ... von Nepal hat ... Lieferung hochsicherer geprägter Kennzeichen, einschließlich Personalisierung, Registrierung ... in der Produktion und Implementierung von Identitätsmanagementlösungen. ... Ausschreibung im Januar teilgenommen, aber Decatur wurde ...
(Date:6/2/2016)... -- Perimeter Surveillance & Detection Systems, Biometrics ... Support & Other Service  The latest report ... analysis of the global Border Security market . ... $17.98 billion in 2016. Now: In November ... software and hardware technologies for advanced video surveillance. ...
Breaking Biology News(10 mins):
(Date:11/30/2016)... , Nov. 30, 2016  Tempus, a technology ... care, and Penn,s Abramson Cancer Center have partnered ... positive response to immunotherapy treatment based on next ... As part of a research collaboration, Tempus will ... melanoma cancer patient data to Penn. Utilizing next-generation ...
(Date:11/30/2016)... 30, 2016 Part of 5m$ Investment ... ... Aptuit, LLC today announced that it had successfully completed ... novel compounds have increased the Screening Collection to over 400,000. ... discovery capabilities of the company. This expansion, complemented by new ...
(Date:11/30/2016)... Woburn, MA (PRWEB) , ... November 30, 2016 ... ... broadband light sources for advanced technology applications, introduces the 5th generation, ultra-bright, Laser-Driven ... the highly successful Laser-Driven Light Source (LDLS™) technology, the EQ-77 offers higher radiance ...
(Date:11/30/2016)... ... November 30, 2016 , ... With growth rates averaging ... after five years and look forward to continuing their expansion in their new office ... area which has been traditionally favoured by the creative industries, so Random42 Scientific Communication ...
Breaking Biology Technology: