Consciousness, Sentiment and Stock Market Returns: Can the GCP Data be Put to Practical Use?

Consciousness, Sentiment and Stock Market Returns: Can the GCP Data be Put to Practical Use?

Ulf Holmberg

The Standard & Poor’s 500 Volatility Index (VIX), a common measure of market sentiment, is found to be significantly correlated with the hardware-generated random numbers produced by the Global Consciousness Project (GCP). More specifically, the largest daily composite GCP data value (Max[Z]) as well as changes in it and its variance is found to significantly interact with changes in the VIX measure. The results suggest that the GCP data can help in explaining market sentiment and that daily market movements can be better understood by studying the GCP data. The results point towards that the GCP data can be put to practical use by traders, which is investigated in an out-of-sample simulation study. By fitting econometric models that either utilize or ignore the GCP data on daily S&P 500 returns, model-dependent investment rules can be established such that the validity and usefulness of the GCP data can be studied. To this end, an out-of-sample simulation study began on the 1st of August 2022 and is scheduled to end on the 1st of August 2023. The result from the study currently suggests that the GCP data indeed can be used to improve daily forecasts such that the GCP data can be used in practice by e.g., traders. Both the philosophical and practical implications of these results are self-evident.

Bio: Dr. Holmberg is an independent researcher. He holds a Ph.D. in Economics and has, in his research, shown that the GCP data covaries with several social science variables. He has also shown that the GCP data covaries with both global stock market returns and global internet search trends and is currently investigating how the GCP data can be put to practical use. He works and lives in Stockholm, Sweden.

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Published on February 28, 2024

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