Related Experiment Video
Updated: Nov 27, 2025

Quantification of Information Encoded by Gene Expression Levels During Lifespan Modulation Under Broad-range Dietary Restriction in C. elegans
Published on: August 16, 2017
The Flow of Information in Trading: An Entropy Approach to Market Regimes
Anqi Liu1, Jing Chen1, Steve Y Yang2
1School of Mathematics, Cardiff University, Cardiff CF24 4AG, UK.
Abstract:
In this study, we use entropy-based measures to identify different types of trading behaviors. We detect the return-driven trading using the conditional block entropy that dynamically reflects the "self-causality" of market return flows. Then we use the transfer entropy to identify the news-driven trading activity that is revealed by the information flows from news sentiment to market returns. We argue that when certain trading behavior becomes dominant or jointly dominant, the market will form a specific regime, namely return-, news- or mixed regime. Based on 11 years of news and market data, we find that the evolution of financial market regimes in terms of adaptive trading activities over the 2008 liquidity and euro-zone debt crises can be explicitly explained by the information flows. The proposed method can be expanded to make "causal" inferences on other types of economic phenomena.
More Related Videos
08:08Using Wavelet Entropy to Demonstrate how Mindfulness Practice Increases Coordination between Irregular Cerebral and Cardiac Activities
Published on: May 10, 2017
11:00Experimental Investigation of Secondary Flow Structures Downstream of a Model Type IV Stent Failure in a 180° Curved Artery Test Section
Published on: July 19, 2016
Related Concept Videos
Entropy
Entropy
When an ideal gas expands isothermally, the disorder in the gas increases. From the molecular perspective, the gas molecules have more volume to move around in.
Consider an infinitesimal step in the expansion, which...
Entropy Change in Reversible Processes
The statement can be further generalized to prove that entropy is a state function. Take a cyclic process between any two points on a p-V diagram.
Entropy and the Second Law of Thermodynamics
The relation between entropy and disorder can be illustrated with the example of the phase change of ice to water. In ice, the molecules are located at specific sites giving a solid state, whereas, in a liquid form, these molecules are much freer to move. The molecular arrangement has therefore become more randomized. Although the change in average...
Entropy within the Cell
The Second Law of Thermodynamics