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December 3, 2008
It’s Got a Beat and You Can Trade To It
This is one of the stranger financial research papers I have seen in some time:
Music and the Market: Song and Stock Volatility
Philip Maymin
Polytechnic Institute of New York University
November 4, 2008Abstract:
I compare 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 year and find that they are significantly negatively correlated. With the recent high stock volatility, people should now prefer less volatile music. Furthermore, the beat variance appears able to predict future market volatility, producing 2.5 volatility points of profit per year on average.
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