Research preview

The escalation of violence in the West Bank creates sudden shifts in risk perception, liquidity, and price dynamics across many asset classes. For quantitative traders, such events are a reminder that models built on historical data can break down when the underlying economic environment changes dramatically. This article shows how to diagnose model fragility, avoid over‑fitting, and build safeguards that keep strategies robust when political risk spikes. The Nature of the Shock When a region experiences a sudden threat of full‑scale conflict, investors often react by reallocating capital toward perceived safe havens and away from assets exposed to the area....