Nostradamus: Weathering Worth
This study addresses the problem of understanding climate-related financial risks for investors and policymakers, though it appears incremental as it applies existing methods to new data.
The paper investigates the relationship between environmental factors (including natural disasters, climate conditions, and carbon dioxide emissions) and stock price fluctuations in the US market, finding a significant correlation based on historical data analysis.
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.