0

I read somewhere that there is an investment fund in the USA which in its trading decisions uses physical laws of hydrodynamics. I asked my physicist friend, on the account of what is really in hydrodynamics there are laws that allow you to analyze market quotes. He said there are different methods analysis, but could not give a definite answer. What do you think about this? Is that marketing ploy? Or in hydrodynamics or related disciplines do have methods and algorithms which can be extrapolated to analyze market quotes (for example, stocks). As far as I understand there is the main idea in the randomness of the process, that for example as the water in the river flows and has random swirls, so market quotes can fluctuate in this style.

I understand that here a contingent of people who are not strongly connected with finance, but I'm more interested in the physical side of the issue

Qmechanic
  • 220,844
RoyalGoose
  • 103

1 Answers1

1

Stock markets are very hard to predict, since there are hundreds of thousands of variables involved. Not to mention they are also highly susceptible to unforeseen events that cannot be predicted, such as natural disasters, whims of key investors, etc. I haven't heard of anybody attempting to use fluid dynamics to analyze stocks, but I think some have tried chaos theory: https://ieeexplore.ieee.org/document/8494103

Yejus
  • 2,136