Chart of the Day: Ebola vs. The Stock Market

Ebola news and stock market volatility – combining the two measures produces an interesting correlation…

ebloa stocks

Ebola vs. Stocks

A little explainer:

VIX measures volatility in the stock market. Volatility is bad for stocks and will cause the market to decline as investors sense a growing panic. (Stocks are down about 10% since Ebola became big news late in August).

SG Pandemic Indicator measures the newsflow for the Ebola outbreak. Spread of the virus = more news stories = higher indicator.

Combining the two measures produces an interesting correlation… are investors pulling out cash in anticipation that the outbreak’s worst is yet to come?

[via FT Alphaville]