How GeoQuant Uses Computer Science to Calculate Political Risk

The video discusses the concept of geopolitical risk, highlighting its measurement through a combination of 22 political risk indicators, including trade and macroeconomic policy risks. It explains the data inputs used, such as traditional country data and media articles, to assess risk levels. The discussion also covers the China-U.S. trade relations and their impact on risk indicators. The video further explores how political risk influences market actions, particularly in emerging markets, and compares political risks across different countries.

What is the primary method used to measure geopolitical risk?

• Surveys and interviews

• Historical data analysis

• Combination of political risk indicators and media analysis

• Economic forecasts

How does political risk generally affect market actions?

• It is a leading factor in market movements

• It only affects emerging markets

• It compounds on economic data

• It has no impact on markets

What has been the impact of political risk on US equity markets since Trump's election?

• Increased market stability

• No significant impact

• Decreased market liquidity

• Significant market volatility

In which markets is the correlation between political risk and market outcomes more evident?

• Emerging markets

• US equities

• Commodities

• Real estate

How can sub-indicators of political risk be useful?

• They only apply to developed markets

• They are irrelevant to market analysis

• They offer detailed insights into specific types of risks

• They provide a single risk score