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:4/18/2017)... 18, 2017  Socionext Inc., a global expert in SoC-based imaging ... server, the M820, which features the company,s hybrid codec technology. A ... Tera Probe, Inc., will be showcased during the upcoming Medtec Japan ... at the Las Vegas Convention Center April ... Click here for ...
(Date:4/13/2017)... April 13, 2017 UBM,s Advanced Design and ... will feature emerging and evolving technology through its 3D ... will run alongside the expo portion of the event ... and demonstrations focused on trending topics within 3D printing ... and manufacturing event will take place June 13-15, 2017 at ...
(Date:4/11/2017)... PALM BEACH GARDENS, Fla. , April 11, ... biometric identity management and secure authentication solutions, today ... million contract by Intelligence Advanced Research Projects Activity ... technologies for IARPA,s Thor program. "Innovation ... the onset and IARPA,s Thor program will allow ...
Breaking Biology News(10 mins):
(Date:10/11/2017)... ... October 11, 2017 , ... ComplianceOnline’s Medical Device Summit ... 7th and 8th June 2018 in San Francisco, CA. The Summit brings together current ... several distinguished CEOs, board directors and government officials from around the world to address ...
(Date:10/11/2017)... , ... October 11, 2017 , ... ... the implantation and pregnancy rates in frozen and fresh in vitro fertilization ... progesterone and maternal age to IVF success. , After comparing the results from ...
(Date:10/10/2017)... ... October 10, 2017 , ... Dr. Bob Harman, founder ... local San Diego Rotary Club. The event entitled “Stem Cells and ... had 300+ attendees. Dr. Harman, DVM, MPVM was joined by two human doctors: ...
(Date:10/9/2017)... Oct. 9, 2017  BioTech Holdings announced today ... which its ProCell stem cell therapy prevents limb ... The Company, demonstrated that treatment with ProCell resulted ... saved as compared to standard bone marrow stem ... resulted in reduction of therapeutic effect.  ...
Breaking Biology Technology: