Market Contagion measures how broadly geopolitical stress in a crisis is propagating across financial markets. A low score means market impact is confined to directly exposed assets (e.g., regional equities and the local currency). A high score means stress is spreading to uncorrelated global assets — broad equity indices, gold, energy futures — suggesting that investors are treating the crisis as a systemic risk rather than a localised one.
For each crisis, POLYCRISIS tracks a basket of directly exposed tickers (drawn from tickers.json exposure mappings) and a set of systemic proxies (VIX, gold spot, oil front-month, USD index). The system computes the rolling 10-day correlation between crisis Event Intensity and each asset's daily move. Contagion is the fraction of systemic proxies whose correlation with the crisis exceeds a threshold of 0.4, weighted by the strength of that correlation.
High (above 0.7): The crisis is moving global risk assets. Equity volatility, safe-haven flows, and commodity pricing are all responding to the same information set that drives this crisis. This has historically been associated with the later stages of an escalation cycle or with crises that threaten global supply chains directly.
Low (below 0.3): Markets are discounting the crisis or viewing it as contained. This can mean they are correct — or it can mean they are complacent. Sudden jumps in Market Contagion from a low base are among the most reliable precursors of large market moves.
Market data from Yahoo Finance (yfinance) and Polygon.io. Crisis data from the POLYCRISIS events database. Correlations recomputed nightly using end-of-day prices.
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