Cargando…
How News May Affect Markets’ Complex Structure: The Case of Cambridge Analytica
The claim of Cambridge Analytica, a political consulting firm, that it was possible to influence voting behavior by using data mined from the social platform Facebook created a sudden fear in its users of being manipulated; consequently, even the market price of the social platform was shocked.We pr...
Autores principales: | , , , |
---|---|
Formato: | Online Artículo Texto |
Lenguaje: | English |
Publicado: |
MDPI
2018
|
Materias: | |
Acceso en línea: | https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7512327/ https://www.ncbi.nlm.nih.gov/pubmed/33265853 http://dx.doi.org/10.3390/e20100765 |
_version_ | 1783586132252950528 |
---|---|
author | Peruzzi, Antonio Zollo, Fabiana Quattrociocchi, Walter Scala, Antonio |
author_facet | Peruzzi, Antonio Zollo, Fabiana Quattrociocchi, Walter Scala, Antonio |
author_sort | Peruzzi, Antonio |
collection | PubMed |
description | The claim of Cambridge Analytica, a political consulting firm, that it was possible to influence voting behavior by using data mined from the social platform Facebook created a sudden fear in its users of being manipulated; consequently, even the market price of the social platform was shocked.We propose a case study analyzing the effect of this data scandal not only on Facebook stock price, but also on the whole stock market. To such a scope, we consider 15-minutes prices and returns of the set of the NASDAQ-100 components before and after the Cambridge Analytica case. We analyze correlations and Mutual Information among components finding that assets become more correlated and their Mutual Information grows higher. We also observe that correlation and Mutual Information are mutually increasing and seem to follow a master curve. Hence, the market appears more fragile after the Cambridge Analytica event. In fact, as it is well-known in finance, an increase in the average value of correlations augments the systemic risk (i.e., all the market can collapse as a whole) and decreases the possibility of allocating a safe investment portfolio. |
format | Online Article Text |
id | pubmed-7512327 |
institution | National Center for Biotechnology Information |
language | English |
publishDate | 2018 |
publisher | MDPI |
record_format | MEDLINE/PubMed |
spelling | pubmed-75123272020-11-09 How News May Affect Markets’ Complex Structure: The Case of Cambridge Analytica Peruzzi, Antonio Zollo, Fabiana Quattrociocchi, Walter Scala, Antonio Entropy (Basel) Article The claim of Cambridge Analytica, a political consulting firm, that it was possible to influence voting behavior by using data mined from the social platform Facebook created a sudden fear in its users of being manipulated; consequently, even the market price of the social platform was shocked.We propose a case study analyzing the effect of this data scandal not only on Facebook stock price, but also on the whole stock market. To such a scope, we consider 15-minutes prices and returns of the set of the NASDAQ-100 components before and after the Cambridge Analytica case. We analyze correlations and Mutual Information among components finding that assets become more correlated and their Mutual Information grows higher. We also observe that correlation and Mutual Information are mutually increasing and seem to follow a master curve. Hence, the market appears more fragile after the Cambridge Analytica event. In fact, as it is well-known in finance, an increase in the average value of correlations augments the systemic risk (i.e., all the market can collapse as a whole) and decreases the possibility of allocating a safe investment portfolio. MDPI 2018-10-06 /pmc/articles/PMC7512327/ /pubmed/33265853 http://dx.doi.org/10.3390/e20100765 Text en © 2018 by the authors. Licensee MDPI, Basel, Switzerland. This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY) license (http://creativecommons.org/licenses/by/4.0/). |
spellingShingle | Article Peruzzi, Antonio Zollo, Fabiana Quattrociocchi, Walter Scala, Antonio How News May Affect Markets’ Complex Structure: The Case of Cambridge Analytica |
title | How News May Affect Markets’ Complex Structure: The Case of Cambridge Analytica |
title_full | How News May Affect Markets’ Complex Structure: The Case of Cambridge Analytica |
title_fullStr | How News May Affect Markets’ Complex Structure: The Case of Cambridge Analytica |
title_full_unstemmed | How News May Affect Markets’ Complex Structure: The Case of Cambridge Analytica |
title_short | How News May Affect Markets’ Complex Structure: The Case of Cambridge Analytica |
title_sort | how news may affect markets’ complex structure: the case of cambridge analytica |
topic | Article |
url | https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7512327/ https://www.ncbi.nlm.nih.gov/pubmed/33265853 http://dx.doi.org/10.3390/e20100765 |
work_keys_str_mv | AT peruzziantonio hownewsmayaffectmarketscomplexstructurethecaseofcambridgeanalytica AT zollofabiana hownewsmayaffectmarketscomplexstructurethecaseofcambridgeanalytica AT quattrociocchiwalter hownewsmayaffectmarketscomplexstructurethecaseofcambridgeanalytica AT scalaantonio hownewsmayaffectmarketscomplexstructurethecaseofcambridgeanalytica |