Algorithmic trading based on the fear of Covid-19 in Europe

Keywords: Algorithmic trading systems, behavioral finance, Covid-19, alternative investment, Eurostoxx 50


he spread of Covid-19 in Europe has affected our way of living, thinking, and even investing. The fear of the epidemic caused a context of maximum uncertainty and volatility in financial markets, which were driven by fear of the spread of the epidemic. In this article we propose an algorithmic trading system on the future of the Eurostoxx 50 that, instead of following technical indicators, follows the number of cases confirmed by Covid-19 in Europe. The back test of this system carried out throughout the weeks of confinement shows that the system is profitable. In this context, confirmed cases data is useful to assess investors’ mood and anticipate the evolution of the market. Therefore, an alternative way of investing arises for maximum uncertainty contexts, based exclusively on behavioral finance.


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How to Cite
Gómez Martínez, R., Prado Román, C., & Cachón Rodríguez , G. (2021). Algorithmic trading based on the fear of Covid-19 in Europe. Harvard Deusto Business Research, 10(2), 295-304.