Viirs Hotspot Density Utility Short
In plain terms
When NASA's VIIRS satellites detect a sustained surge of fire hotspots in California, PG&E and other CA utilities face heightened liability risk — short them. The flip side: reinsurers benefit from higher premium pricing post-event — go long.
How it works
Sustained high VIIRS satellite hotspot counts within California / PG&E service territory bounding-box correlate with elevated wildfire-liability risk for the utility (PG&E ~$30B aggregate liability from 2017-2018 fires) and lift reinsurance demand on the offsetting side. Uses the VIIRS feed (591MB table, 5y depth, 375m resolution) for a faster-moving signal than NIFC weekly summaries.
Data dependencies
- Daily prices
Adjusted-close OHLCV for every US-listed ticker; primary price feed.
- Viirs fires
A data feed this strategy reads, refreshed on its normal schedule.
Expected edge
- Reported return
- Internal design estimate, not paper-derived: -1 to -3% utility / +1-2% reinsurer over 10-20d during top-decile fire periods.
- Tested over
- Internal design choice, not paper-derived: T+1 entry, 10/20 trading-day hold.
-1 to -3% on utility short / +1-2% on reinsurer long over 10-20d during top-decile fire periods.
Example tickers where this is likely to fire
Illustrative only, the signal fires based on the live data, not a fixed list.
Related families
Big CA wildfire → PG&E and other CA utilities drop for 1-3 weeks.
Big CA wildfire in PG&E / Edison / Sempra territory → that utility's stock drops for 2-4 weeks.
When major wildfires (including in Canada) blanket US airline hubs in smoke and degrade air quality, airlines face delays, diversions, and lost revenue. Short the US airline basket for 1-4 weeks after the worst smoke events.
Explore Viirs Hotspot Density Utility Short on alphactor.ai
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