earthquake insurance window short
What it checks
When a major earthquake (magnitude 6 or higher) hits California, Japan, or the Pacific Rim, reinsurers take an immediate loss-recognition hit — short them for 1-2 weeks. Construction firms gain on rebuild demand — go long for 3 months.
Mechanism
Major earthquakes (M >= 6.0) in California, Japan, or Pacific Rim regions trigger expected cat-loss premium widening for regional reinsurers — they take on the immediate loss estimate ahead of the formal accounting. Construction equity gets the longer-horizon rebuild bid. This family is the focused reinsurer SHORT 5-10d + construction LONG 60-90d pair.
Signal rule
usgs_earthquakes magnitude >= 6.0 with region matching CA/Japan/Pacific Rim substring (T+1) -> SHORT reinsurer (ACGL, RE, EG, RNR, AGO) for 5/10 trading days OR LONG construction (CAT, MTW, URI, EME, etc.) for 60/90 trading days.
Data dependencies
daily_pricesAdjusted-close OHLCV for every US-listed ticker; primary price feed.
usgs_earthquakesWorker data table — see services/worker schema.
Expected edge
- Paper alpha
- -2-4% reinsurer / +2-4% construction
- Paper window
- Reinsurer T+1 to T+10d; Construction T+1 to T+90d
-2-4% reinsurer over 5-10d; +2-4% construction over 60-90d (Ferreira-Karali 2015).
Example tickers where this is likely to fire
Illustrative only — the signal fires based on the live data, not a fixed list.
Related families
usgs earthquake eventEvent-DrivenM6.0+ events → P&C insurer underperformance as loss reserves reprice.
usgs earthquake regional driftEvent-DrivenM6.0+ in CA → CA-HQ REIT/bank/utility short 1-15d.
enso pc insurance shortWeatherStrong ENSO oscillation (|ONI| >= 1.5) — either El Niño or La Niña — historically correlates with elevated US severe-weather loss patterns: tornadoes (Niña), Atlantic hurricane season amplitude, Pacific typhoons. The US P&C insurer basket (AIG, ALL, TRV, PGR, CB) takes on elevated cat-loss probability over the subsequent 90-180 days, depressing equity prices.
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