Modelling the Bottom of the Covid-19 Financial Crisis

The global pandemic of current scope is something that was experienced by only a few living people. We have some historical accounts of how it unfolded in the past, but otherwise, it is uncharted territory. It is a true Black Swan event — event that I believe was in nobody’s lineup of stress testing scenarios. But we can still try to get some understanding of the scope of the current situation.

The actual global crisis is a mix of 2 crisis. The first one is the health-care / pandemic crisis, during which millions of people will be infected, and unfortunately, a lot of people will die. The second crisis is the economic crisis/recession, which will follow simultaneously with (or soon after) the first one (due to the decrease in worldwide supply and demand).

The second crisis cannot end before the first one is solved. We cannot exactly say when the market bottom will occur, but at least we can try to model the minimum time needed for things to get under control during the pandemic.

https://quantpedia.com/modelling-the-bottom-of-the-covid-19-financial-crisis/

--

--

--

Quantpedia.com — The Encyclopedia of Quantitative and Algorithmic Trading Strategies

Love podcasts or audiobooks? Learn on the go with our new app.

Recommended from Medium

Coral Springs: ‘out with the old, in with the new’ may affect your property and business

‘Entrepreneurship’ For Sale

I would like to talk on a topic HFT

Where are the tower cranes?

First-Half Month Cash-Flow News and Momentum in Stocks

Big Mac and rupiah valuation

A graphics with two panels. The left-hand side panel is a line chart that plots the actual exchange rate and implied exchange rate of rupiah against the United States dollar between 2000 and 2020 based on data from The Economist’s Big Mac Index. This panel shows that rupiah was undervalued against the dollar. The right-hand side panel shows the valuation of rupiah against the dollar over the same time frame. This panel shows exactly the same insight, but in terms of percentage.

Boca Bits — FIA Boca 2017 Day One

My 7 Reasons Why Capitalism is Done (with free excerpt from my latest book included)

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store
Quantpedia

Quantpedia

Quantpedia.com — The Encyclopedia of Quantitative and Algorithmic Trading Strategies

More from Medium

How To Pick The Right Funds

SmartAB™ Wisdom #5: Master The Speed Of Thought

How To Avoid a Climate Disaster by Bill Gates (summarized from Chapter 5 to chapter 11)

#55 Weekly Charts — Commodity Equities & Coal Production