Music and the Market: Song and Stock Volatility
NYU Poly - Department of Finance and Risk Engineering
October 11, 2011
Popular music may presage market conditions because people contemplating complex future economic behavior prefer simpler music, and vice versa. In comparing the annual average beat variance of the songs in the US Billboard Top 100 since its inception in 1958 through 2007 to the standard deviation of returns of the S&P 500 for the same or the subsequent year, a significant negative correlation is observed. Furthermore, the beat variance appears able to predict future market volatility, producing 2.5 volatility points of profit per year on average.
Number of Pages in PDF File: 29
Keywords: music, complexity, volatility, billboard, strategy, behavioral
JEL Classification: G12working papers series
Date posted: November 5, 2008 ; Last revised: October 12, 2011
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