Research preview

A sudden, unexplained drop of a commercial aircraft over the Middle East created an immediate spike in market volatility and raised questions about the speed at which quantitative strategies can incorporate such geopolitical shocks. This article shows how high‑dimensional machine‑learning tools—regularised regressions, factor models, and debiased estimators—can be built to detect, adjust to, and profit from the market response to a terror‑linked event. From a Shock to a Signal When news broke that flight FZ1073 lost 5,000 m in under 30 seconds and that prosecutors were opening a terrorism investigation, equity and bond markets reacted within seconds....