Research internship - Analyzing Climate Variables and Their Financial Implications

ABOUT CFM

Founded in 1991, we are a global quantitative and systematic asset management firm applying a scientific approach to finance to develop alternative investment strategies that create value for our clients.
We value innovation, dedication, collaboration, and the ability to make an impact. Together, we create a stimulating environment for talented and passionate experts in research, technology, and business to explore new ideas and challenge existing assumptions.

The project

This research internship is designed to explore two interconnected themes: the shifting statistics of climate variables beyond mean temperature and potentially the subsequent impacts these changes may have on equities, commodities, and futures markets.

I. Analyzing Statistics and Predictability of Climate Variables
The first phase of this study will focus on dissecting the alterations in meteorological statistics, moving beyond the mean global temperature and extreme weather event probability:

• to examine change of variability, skewness, higher moments of temperature distributions and of other weather variables
• to examine change of predictability of these variables leveraging techniques from time series analysis.

By leveraging comprehensive datasets such as those from the Copernicus project, we aim to detail significant trends and patterns in climatic parameters in time and in spatial variability, including precipitation and wind dynamics.

II. Financial Impacts of Climatic Variability
The second phase potentially will address how these evolving climate statistics influence financial markets, with a particular focus on stocks and commodities. Previous studies such as Hong et al. (2019) highlight the inefficiencies in market pricing concerning climate risks, drawing attention to the potential underpricing of environmental risks in equities. Additionally, sector-specific vulnerabilities, such as those in agriculture and energy, will be explored examining how climate risk hedging can impact asset valuations and investor behavior. Moreover, the study will investigate the cross-asset implications emphasizing linkages between climate variability and stock returns.

Profile

You will be tasked with managing and analyzing an extensive dataset with decades of history and a worldwide coverage. This role thus requires a keen ability to handle and interpret vast amounts of data efficiently.

- Fluency in Python
- Fluency in statistical analysis and time series analysis
- Experience in data driven projects
- Large datasets manipulation
- (Optional) Previous experience with weather data
- (Optional) AWS knowledge for data processing

- Good level in English (written and spoken

References:

1. Hansen, J., et al. (2012). "Perception of climate change." Proceedings of the National Academy of Sciences.
2. Hong, H., Li, F. W., & Xu, J. (2019). "Climate Risks and Market Efficiency." Journal of Econometrics.
3. Trenberth, K. E. (2011). "Changes in precipitation with climate change." Climate Research.
4. Coumou, D., & Rahmstorf, S. (2012). "A decade of weather extremes." Nature Climate Change.
5. Kang, W., & Rouwenhorst, K. G. (2020). "Weather Changes and Stock Returns: Evidence from European Markets." Journal of Financial Economics.
6. Screen, J. A., & Deser, C. (2019). "Pacific Ocean variability influences extreme winter temperatures in northern continents." Nature Climate Change.
7. Myhre, G., et al. (2019). "Frequency of extreme precipitation increases extensively with event rareness under global warming." Scientific Reports.
8. Zappa, G., et al. (2020). "Future European wind energy resources are impacted by internal climate variability." Environmental Research Letters.
9. Kossin, J. P., et al. (2020). "Global increase in major tropical cyclone exceedance probability over the past four decades." Proceedings of the National Academy of Sciences.

EQUAL OPPORTUNITIES STATEMENT

We are continuously striving to be an equal opportunity employer and we prohibit any discrimination based on sex, disability, origin, sexual orientation, gender identity, age, race, or religion. We believe that our diversity, breadth of experience, and multiple points of view are among the leading factors in our success.
CFM is a signatory of the Women Empowerment Principles.
 

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