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Diffusion Geometry Unravels the Emergence of Functional Clusters in Collective Phenomena

April 28, 2017 by Complexity Digest   Comments (0)

Collective phenomena emerge from the interaction of natural or artificial units with a complex organization. The interplay between structural patterns and dynamics might induce functional clusters that, in general, are different from topological ones. In biological systems, like the human brain, the overall functionality is often favored by the interplay between connectivity and synchronization dynamics, with functional clusters that do not coincide with anatomical modules in most cases. In...

The Emergence of Canalization and Evolvability in an Open-Ended, Interactive Evolutionary System

April 28, 2017 by Complexity Digest   Comments (0)

Natural evolution has produced a tremendous diversity of functional organisms. Many believe an essential component of this process was the evolution of evolvability, whereby evolution speeds up its ability to innovate by generating a more adaptive pool of offspring. One hypothesized mechanism for evolvability is developmental canalization, wherein certain dimensions of variation become more likely to be traversed and others are prevented from being explored (e.g. offspring tend to have...

Incoherence-Mediated Remote Synchronization

April 28, 2017 by Complexity Digest   Comments (0)

In previously identified forms of remote synchronization between two nodes, the intermediate portion of the network connecting the two nodes is not synchronized with them but generally exhibits some coherent dynamics. Here we report on a network phenomenon we call incoherence-mediated remote synchronization (IMRS), in which two noncontiguous parts of the network are identically synchronized while the dynamics of the intermediate part is statistically and information-theoretically incoherent. We...

Evolving as a holobiont

April 28, 2017 by Complexity Digest   Comments (0)

Some of the most exciting recent advances in biology have been in our understanding of how the microbiome—the community of bacteria, fungi, and other single-celled microorganisms—influences host functions and behaviors. From the way we eat, to the way we think, to our susceptibility to diseases (just to name a few), the microbiome has a huge impact on human physiology. But microbiomes aren’t just for humans, or even just for mammals. The composition and function of microbiomes...

Science in service to the public good

April 28, 2017 by Complexity Digest   Comments (0)

We give scientists and engineers great technical training, but we’re not as good at teaching ethical decision-making or building character. Take, for example, the environmental crisis that recently unfolded in Flint, Michigan — and the professionals there who did nothing to fix it. Siddhartha Roy helped prove that Flint’s water was contaminated, and he tells a story of science in service to the public good, calling on the next generation of scientists and engineers to dedicate...

Evidence of Complex Contagion of Information in Social Media: An Experiment Using Twitter Bots

April 27, 2017 by Complexity Digest   Comments (0)

It has recently become possible to study the dynamics of information diffusion in techno-social systems at scale, due to the emergence of online platforms, such as Twitter, with millions of users. One question that systematically recurs is whether information spreads according to simple or complex dynamics: does each exposure to a piece of information have an independent probability of a user adopting it (simple contagion), or does this probability depend instead on the number of sources of...

Optimal client recommendation for market makers in illiquid financial products. (arXiv:1704.08488v1 [q-fin.CP])

April 27, 2017 by Quantitative Finance at arXiv   Comments (0)

The process of liquidity provision in financial markets can result in
prolonged exposure to illiquid instruments for market makers. In this case,
where a proprietary position is not desired, pro-actively targeting the right
client who is likely to be interested can be an effective means to offset this
position, rather than relying on commensurate interest arising through natural
demand. In this paper, we consider the inference of a client profile for the
purpose of corporate bond...

Economic Neutral Position: How to best replicate not fully replicable liabilities. (arXiv:1704.08523v1 [q-fin.RM])

April 27, 2017 by Quantitative Finance at arXiv   Comments (0)

Financial undertakings often have to deal with liabilities of the form
'non-hedgeable claim size times value of a tradeable asset', e.g. foreign
property insurance claims times fx rates. Which strategy to invest in the
tradeable asset is risk minimal? We expand the capital requirements based on
value-at-risk and expected shortfall using perturbation techniques. We derive a
stable and fairly model independent approximation of the risk minimal asset
allocation in terms of the claim size...

Dynamical Analysis of Stock Market Instability by Cross-correlation Matrix. (arXiv:1704.08612v1 [q-fin.ST])

April 27, 2017 by Quantitative Finance at arXiv   Comments (0)

We study stock market instability by using cross-correlations constructed
from the return time series of 366 stocks traded on the Tokyo Stock Exchange
from January 5, 1998 to December 30, 2013. To investigate the dynamical
evolution of the cross-correlations, cross-correlation matrices are calculated
with a rolling window of 400 days. To quantify the volatile market stages where
the potential risk is high, we apply the principal components analysis and
measure the cumulative risk fraction...