Economic Impact Analysis of the Coronavirus, An Alternative Data Perspective

Abstract

Alternative data is transforming the investment management process for financial industry, hedge funds, mutual funds, foundations, and pension funds. This paper describes the use of alternative data on the field of finance, particularly illustrating the complex forces driving the stock markets in China and the U.S., through the exploration of the alternative data through the outbreak of COVID-19. The analytic results demonstrate that the subway traffic and commercial housing deal area are positively correlated to the Chinese market in a rather weak level, and that search trends of coronavirus is negatively correlated to the American market with high reliability. The alternative data, which are closely connected with the situation of the coronavirus outbreak, have the ability of predicting where the markets are heading.

Keywords: coronavirus, COIVD-19, alternative data, investment, high frequency data, stock market

JEL Classification: E00, G00, G23, H3, O10