Nostradamus: Weathering Worth

TL;DR

This study investigates the correlation and causation between environmental factors, including natural disasters and climate conditions, and stock market fluctuations, revealing significant relationships through analysis of historical data and case studies.

Contribution

It provides a comprehensive analysis of environmental impacts on stock prices, integrating natural disaster effects and climate indicators with financial data for the first time.

Findings

Significant correlation between climate variables and stock market fluctuations

Natural disasters influence investor sentiment and stock performance

Environmental factors can predict short-term and long-term market trends

Abstract

Nostradamus, inspired by the French astrologer and reputed seer, is a detailed study exploring relations between environmental factors and changes in the stock market. In this paper, we analyze associative correlation and causation between environmental elements (including natural disasters, climate and weather conditions) and stock prices, using historical stock market data, historical climate data, and various climate indicators such as carbon dioxide emissions. We have conducted our study based on the US financial market, global climate trends, and daily weather records to demonstrate a significant relationship between climate and stock price fluctuation. Our analysis covers both short-term and long-term rises and dips in company stock performances. Lastly, we take four natural disasters as a case study to observe the effect they have on people's emotional state and their influence on the stock market.