Financial Influences and Scale-Free Networks

  • Nitin Arora
  • Babu Narayanan
  • Samit Paul
Part of the Lecture Notes in Computer Science book series (LNCS, volume 3991)


We consider the problem of analyzing influences in financial networks by studying correlations in stock price movements of companies in the S&P 500 index and measures of influence that can be attributed to each company. We demonstrate that under a novel and natural measure of influence involving cross-correlations of stock market returns and market capitalization, the resulting network of financial influences is Scale Free. This is further corroborated by the existence of an intuitive set of highly influential hub nodes in the network. Finally, it is also shown that companies that have been deleted from the S&P 500 index had low values of influence.


Market Capitalization Stock Price Stock Prex Scale Free Network Protein Interaction Network 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.


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Copyright information

© Springer-Verlag Berlin Heidelberg 2006

Authors and Affiliations

  • Nitin Arora
    • 1
  • Babu Narayanan
    • 2
  • Samit Paul
    • 2
  1. 1.Google Inc.BangaloreIndia
  2. 2.GE Global ResearchJohn F. Welch Technology CentreBangaloreIndia

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