Symmetry and financial Markets

TL;DR

This paper explores the concept of symmetry across physics, game theory, technical analysis, and economic growth, proposing that symmetry principles could offer new insights into financial market behaviors.

Contribution

It introduces the novel idea that symmetry, a fundamental concept in physics, can be applied to understand and analyze financial markets and decision-making processes.

Findings

Symmetry may underlie strategies in financial decision-making.

Symmetry concepts could explain patterns in technical analysis.

Potential links between symmetry and long-term economic growth.

Abstract

It is hard to overstate the importance that the concept of symmetry has had in every field of physics, a fact alluded to by the Nobel Prize winner P.W. Anderson, who once wrote that physics is the study of symmetry. Whereas the idea of symmetry is widely used in science in general, very few (if not almost no) applications has found its way into the field of finance. Still, the phenomenon appears relevant in terms of for example the symmetry of strategies that can happen in the decision making to buy or sell financial shares. Game theory is therefore one obvious avenue where to look for symmetry, but as will be shown, also technical analysis and long term economic growth could be phenomena which show the hallmark of a symmetry