Solar Activity and the Dow Jones Industrial Average
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We examined the relationship between solar activity and the Dow Jones Industrial Average from 1896 to 2021. We employed sliding-window correlation, cross-correlation, and wavelet coherence analyses. It was discovered that the correlation with 11-year periodicity is more than 0.5 during the 1906–1936 and 1964–2000 time periods, and is visible with a 95% confidence level during the 1910–1930 and 1990–1994 time periods. This correlation is proved by coherence, with a high 95% confidence level revealed between cosmic ray data and the Dow Jones Industrial Average in the same periods where the correlation between sunspot numbers and cosmic ray data is high (1964–2000), but with a distinct phase difference. Because financial indices reflect many simultaneous influences, revealing a correlation between studied events is difficult. nevertheless, it's significant to study the intercorrelations between financial indices and solar activity or cosmic rays for forecasting financial models and systemic risk assessments.
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Wavelet software by C. Torrence and G. Compo - http://paos.colorado.edu/research/wavelets/
Crosswavelet and wavelet coherence software by A. Grinsted - http://noc.ac.uk/using-science/crosswavelet-wavelet-coherence
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https://stooq.com/^DJI - Dow Jones Industrial - U.S. - Stooq
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