An unusual approach to understanding the market
The observation of the price trend of the WTI and the Brent, compared to the Dow Jones index, made along the chronological series 1 January 2019 April - 20 April 2020, shows interesting aspects, for a significant difference in behavior, starting from the now famous "Black Monday" of 9 March 2020.
The observation of the price trend of the WTI and the Brent, compared to the Dow Jones index, made along the chronological series 1 January 2019 April - 20 April 2020, shows interesting aspects, for a significant difference in behavior, starting from the now famous "Black Monday" of 9 March 2020.
Until March 6, the price of the barrel for both oils remained above
the psychological threshold, and in many cases of break even for the upstream industry, of $ 40 / barrel.
the psychological threshold, and in many cases of break even for the upstream industry, of $ 40 / barrel.
Plotting the points of the "price per barrel" and "Dow Jones" value pairs on a plane and connecting them chronologically, these seem to be particles that move along irregular, but not entirely random, paths, indicating a partial correlation between these values and a link between the trend in the price of the barrel and that of the stock exchange.
On the contrary, starting from 9 March, the movement of these particles takes on the appearance of a Brownian motion, a term used to indicate the chaotic and random movement of particles, without any directionality, suggesting that for the construction the price of the barrel have become relevant in percentage terms other factors, which, otherwise, do not influence the general trend of the stock exchange.
The chaotic nature of the motion is more accentuated for the WTI.
The comparison between the prices of the two barrels shows a strong relationship between the oils until April 20, when it disappears with the zeroing of the WTI price.
Any idea about the other factors influencing the prices?
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