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:4/11/2017)... , April 11, 2017 Crossmatch®, a ... authentication solutions, today announced that it has been ... Research Projects Activity (IARPA) to develop next-generation Presentation ... "Innovation has been a driving force ... program will allow us to innovate and develop ...
(Date:4/5/2017)... , April 5, 2017  The Allen Institute ... Allen Cell Explorer: a one-of-a-kind portal and dynamic digital ... 3D imaging data, the first application of deep learning ... human stem cell lines and a growing suite of ... platform for these and future publicly available resources created ...
(Date:3/30/2017)... March 30, 2017  On April 6-7, 2017, Sequencing.com ... Genome hackathon at Microsoft,s headquarters in ... will focus on developing health and wellness apps that ... Hack the Genome is the first hackathon for ... world,s largest companies in the genomics, tech and health ...
Breaking Biology News(10 mins):
(Date:6/22/2017)... ... June 22, 2017 , ... For the ... has produced a Spotlight series on “Cell Therapy Regulation” for its ... leading experts on the unique regulatory challenges of stem cell medical research. , ...
(Date:6/20/2017)... ... June 20, 2017 , ... CTNext , Connecticut’s ... has formed a Higher Education Entrepreneurship Advisory Committee to implement the recommendations of ... other high-ranking representatives from 35 higher education institutions across the state over the ...
(Date:6/20/2017)... Parsippany, NJ (PRWEB) , ... June 20, 2017 , ... ... OHAUS makes the transition from being a trusted supplier in the weighing industry, to ... including cell extractions, ELISA essays, enzyme reactions, immunoassays, hybridizations and more, allowing for ...
(Date:6/19/2017)... ... June 19, 2017 , ... A colony of healthy honey bees is like ... delivering pollen and nectar containing nutrients necessary for growth and survival. Better nutrition gives ... recent indicators point to a decline in honey bee health. Sick and weakened bees ...
Breaking Biology Technology: