The first wave impact of the COVID-19 pandemic on the Nasdaq Helsinki stock exchange: Weak signal detection with managerial implications
Keywords:
Covid-19, early signals, Nasdaq Helsinki, signal detection, social mediaAbstract
The global pandemic caused by the coronavirus disease (COVID-19) came mostly
as a surprise and had a major effect on the global economy. This type of major events that can
bring societies to nearly a total standstill are difficult to predict but have a significant impact
on business activities. Nevertheless, weak signals might be possible to detect beforehand to
enable preparation for the impact, both globally and locally. This study analyses the impact of
the first wave of the COVID-19 pandemic on the Nasdaq Helsinki stock exchange by utilising
large-scale media analytics. This entails gaining data through media monitoring over the entire
duration of the pandemic by applying black-box algorithms and advanced analytics on real
cases. The data analysis is carried out to understand the impact of a such global event in
general, while aiming to learn from the potential weak signals to enable future market
intelligence to prepare for similar events. A social media firestorm scale, similar to the Richter
scale for earthquakes or Sapphir-Simpson scale for hurricanes, is utilised to support the
analysis and assist in explaining the phenomenon. The results indicate that pandemics and
their impact on markets can be studied as a subset of a media firestorms that produce a sharkfin
type of pattern in analytics. The findings indicate that early signals from such events are
possible to detect by means of media monitoring, and that the stock exchange behaviour is
affected. The implications include highlighting the importance of weak signal detection from
abundant data to have the possibility to instigate preventive actions and prepare for such events
to avoid maximum negative business impact. The early reaction to this type of events requires
a very streamlined connection between market intelligence and different business activities.
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