AMO 60-year cycle prices coastal-cat risk eras

AMO is the Atlantic Multidecadal Oscillation, a roughly 65-year swing in North Atlantic sea temperatures whose warm phases bring more hurricanes. This tests whether its 60-year cycle prices coastal catastrophe risk eras. Tested at one and three months; 2 of 2 cleared the usual bar alone, none once the size of the search was counted.

Conclusion: Voided

Withdrawn on review. The only result in a 94-test batch to survive correction, but the ocean cycle it relies on turns over every ~65 years and the 340-month window covers 0.44 of one turn — roughly 25 independent observations, not 340.

Every test, against the significance threshold

persistence-robust p · left is stronger evidence
00.050.250.5112m6m
Filled markers fall below the 0.05 threshold before multiple-testing correction; hollow markers do not. Correction is applied across the whole batch, so an individual marker clearing the line is not a result on its own.
Best p
0.003
directional
Best q
0.09
BH-FDR
Fired
2/2
at p<0.05
Survived
0
q ≤ 0.10

Method

Hypothesis

AMO 60-year cycle prices coastal catastrophe risk eras

Rule

prior = -1 # higher signal -> lower returns
function test(horizon h):
basket = inverse_vol_weighted_mean(instruments)
y = sum(basket, t+1 .. t+h) # strictly forward
x = signal[t] # known at t
beta, t_stat = OLS(y ~ x) with Newey-West HAC
null = [slope(y, roll(x, k)) for k in all offsets]
p = (count(null beyond beta) + 1) / (len(null) + 1)
return beta, t_stat, p
reject if Benjamini-Hochberg q <= 0.10 across the whole screen

Analysis

Basis for withdrawal

AMO has lag-1 autocorrelation 0.972, giving roughly 25 effective observations against a nominal 340, and the test window spans 0.44 of one ~65-year AMO cycle. The reported p of 0.0033 is exactly 1/304 — the smallest value the permutation test can return — because with under one full cycle every circular shift is near-degenerate and no valid null distribution exists. This was the screen's only FDR survivor.

Evaluation

Table 1 · Test results

12m6m+2.5-2.5
HorizonnβHAC tHAC pShift p (dir)Shift p (2-sided)
12m340-0.0992-2.490.0130.0030.020
6m340-0.0496-2.410.0160.0190.053
Directional p-value scores the pre-declared prior; the two-sided value makes no directional assumption.

Reference

Instruments

last price and one-month change, live from Yahoo Finance
SymbolNotes
RNRRenaissanceRe Holdings Ltd. — listed on NYSE, in USD.
EGEverest Group Ltd. — listed on NYSE, in USD.
CBChubb Limited — listed on NYSE, in USD.

Sample

monthly, per signal availability

Sources

NASA Goddard Institute for Space Studies. GISS Surface Temperature Analysis (GISTEMP). v4, global land–ocean temperature anomaly. data.giss.nasa.gov/gistemp
NOAA Climate Prediction Center. Teleconnection indices. AO, NAO, PNA, SAM. www.cpc.ncep.noaa.gov/products/precip/CWlink/daily_ao_index/ao.shtml
NOAA Physical Sciences Laboratory. Climate indices. ONI, Niño 3.4, MEI v2, DMI, PDO, AMO, TNA, QBO, solar flux. psl.noaa.gov/data/climateindices/list
Royal Observatory of Belgium. Sunspot Number. SILSO, monthly mean. www.sidc.be/SILSO/datafiles
Yahoo Finance. Historical market prices. Adjusted close, month-end. Retrieved with yfinance. finance.yahoo.com

Revision history

RevStageStatusChange
01DraftDirection declared before testing
02ScreenedSurvivedq = 0.085; the only survivor in a 94-test batch
03ReviewedVoidedThe ocean cycle it relies on turns over every ~65 years; the test window covers less than half of one turn
algorithmic-trading-anthology-july-2026-amo-60yr-coastal-cat-eras | d/rksci