Exploring the interconnected evolution of modern physics and finance, discussing the mathematical similarities between quantum physics and quantitative finance. Delving into the influence of quantum physics on finance, highlighting the impact of mathematical structures on our modern view of uncertainty and randomness in different domains.
Quantitative finance and physics share applied mathematics and external validation principles.
Historical parallels between physics and finance include significant events like the emergence in 1900 and Einstein's contributions in 1905.
Deep dives
Similarities Between Physics and Quantitative Finance
The speaker discusses the similarities between physics and quantitative finance, highlighting key connections such as the applied mathematics and external validation present in both disciplines. Drawing inspiration from physicists turned finance pioneers like Emmanuel Thurman, the speaker explores how both fields share a foundation in mathematics and a need for theories that are externally validated to ensure accuracy and applicability.
Historical Parallels Between Physics and Quantitative Finance
The podcast delves into the historical parallels between physics and quantitative finance, citing significant events in each field. It mentions the simultaneous emergence of modern physics and quantitative finance in 1900, illustrated by Max Planck's work on quantum physics and Louis Bachelier's mathematical formulations of stock prices. The significance of Einstein's papers in 1905, linking them to Brownian motion in both physics and finance, further solidifies the historical connections between the two domains.
Mathematical Discoveries and Intellectual Frameworks
The conversation moves towards the interplay between mathematical discoveries and intellectual frameworks in physics and quantitative finance. It highlights the intertwined relationship between math and practical applications, crucial for advancements in both fields. Additionally, the speaker reflects on the importance of having intellectual frameworks to comprehend complex concepts, using examples like the analogy between Black-Scholes equation and the heat equation to enhance understanding. The discussion ends with a perspective on how math shapes our worldview and influences various aspects of life, including financial markets and everyday perceptions.
Professor Zoro speaks with Samuel Black about the interesting relationship between Quant Finance and the world of Physics.
Samuel Black is a Master in Financial Engineering, with an undergraduate in Physics.
https://www.linkedin.com/in/samuel-v-black/
Patrick Zoro
https://www.linkedin.com/in/patrick-z-08bb5b5a/
Lehigh Master in Financial Engineeringhttps://business.lehigh.edu/academics/graduate/masters-programs/ms-financial-engineering
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