A Wavelet-Based Econophysical Analysis Of Multi-Scale Coupling Between Geomagnetic Activity And Market Dynamics

Document Type

Article

Source of Publication

Arabian Journal For Science And Engineering

Publication Date

4-14-2026

Abstract

This study explores multi-scale interactions between geo-astronomical activity and financial market dynamics from a complex systems perspective. Using high-frequency data from the EUR/USD exchange rate and S&P 500 trading volume, we examine whether geomagnetic fluctuations and planetary motion indices contain statistically meaningful information for short-term market forecasting. A redundant tight wavelet frame decomposition is employed to capture localized time-frequency structures and to reduce sensitivity to noise. This shift-invariant representation enables the detection of coherent low-frequency patterns that may reflect underlying systemic responses to external perturbations. Following rigorous preprocessing and temporal alignment of financial and geophysical datasets, model performance is evaluated using both in-sample and out-of-sample experiments with RMSE, MAE, and R-out(2) as accuracy metrics. The results indicate that several geomagnetic indicators, particularly those associated with low-frequency components, exhibit persistent statistical association with market variables and provide measurable predictive utility under strict out-of-sample testing. While no causal inference is implied, the findings highlight reproducible statistical dependencies linking environmental and financial dynamics, suggesting potential applications in early-warning systems and stress prediction within complex economic environments.

ISSN

2193-567X

Publisher

Springer Science and Business Media LLC

Disciplines

Business

Keywords

Financial market modeling, Geo-astronomical influences, EUR/USD exchange rate, Geomagnetic field induction, Natural factors in forex markets, S& P 500 dynamics, Wavelet frame analysis

Indexed in Scopus

no

Open Access

no

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