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Impact of Weather on the Stock Market Returns of Different Industries in Germany

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  • Schulte-Huermann, Astrid

Abstract

Weather affects people's mood, according to psychological studies. For example, low temperature can cause aggression, whereas high temperature can induce apathy. Therefore, it may be possible that weather-influenced mood, driven by mood's impact on decision-making, exerts an influence on investment decisions and risk-taking behaviour. Thereby, it might also impact stock market returns. I examine market returns of nine industries in Germany. Empirical results illustrate two findings. First, a statistically significant, negative correlation between market returns and temperature, second, a different effect of weather on industrial sectors is identified. A significant correlation can be found for six out of nine sectors.

Suggested Citation

  • Schulte-Huermann, Astrid, 2020. "Impact of Weather on the Stock Market Returns of Different Industries in Germany," Junior Management Science (JUMS), Junior Management Science e. V., vol. 5(3), pages 295-311.
    • Handle: RePEc:zbw:jumsac:294936
    DOI: 10.5282/jums/v5i3pp295-311
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    References listed on IDEAS

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