3  Research Questions

Extracted from the PhD proposal §1 so the current state of the research question doesn’t require reading the full proposal. When the proposal’s hypothesis or questions change, update both.

3.1 Central hypothesis

Changes in the spectral properties and meso-scale organisation of dynamic multiplex financial networks — constructed from factor exposures, supply-chain dependencies, and institutional ownership — provide statistically significant early-warning signals of systemic market instability, with measurable lead time relative to standard volatility- and correlation-based indicators.

3.2 Overarching question

Can dynamic heterogeneous multiplex representations of financial markets provide robust early-warning signals of systemic instability that materially precede conventional volatility-based and return-correlation risk measures?

3.3 Current hypotheses / sub-questions

  1. Which multiplex network observables (algebraic connectivity, eigenvalue gap, spectral density shifts, network entropy, community fragmentation, centrality concentration) reliably signal impending systemic instability?
  2. How much lead time do these indicators provide compared with standard risk metrics (implied/realised volatility, DCC-GARCH correlation spikes, realised drawdowns)?
  3. Under what network generative mechanisms (ER, BA, stochastic block models, empirically-derived topologies) do the indicators and detection performance generalise?
  4. Do graph neural network models improve predictive skill over spectral/hand-crafted indicators, and if so, by how much and at what cost to interpretability?

3.4 Open questions (not yet in the proposal’s formal scope)

  • Does a multi-layer (factor + supply-chain + ownership) network out-perform the single-layer factor/comomentum view the platform already measures, or does it just add noise? The platform’s own single-layer experiment found connectedness moved with stress, not ahead of it — see research-platform/findings/asset-dependency-networks-econophysics-review.md. This is the open question the multi-layer extension is meant to answer, and the design is meant to fail cheaply if it doesn’t.
  • How should a validated early-warning signal enter the trading system without becoming an optimizer that sizes the book — i.e. staying risk observability, not a second lifecycle gate? (Boundary asserted in whitepaper §7, not yet resolved in the research.)

3.5 Where the answers will come from

  • Methodology — how each question is tested.
  • Experiments — the running record of what’s been tried against each question.
  • Journal — the raw, dated account of what changed a question, closed one, or opened a new one.