Coursework for MM917 Networks in Finance
Report due: 23.59 pm 06/05/2018 (GMT) Submit to: email@example.com
The goal of this coursework is that you prepare a report. It will be 30% of your mark. There are two parts of the report. The first part is about the analysis of research papers on Networks in Finance and the second part is about analysis of network data.
Part 1: Analysis of research papers on networks in finance
Please find the attached file (Papers.zip) on Myplace. The file contains all the review papers and research papers. Each of you needs to read three review papers and an assigned working paper to write your report.
Review papers The Review papers will provide you general information on the field of financial networks. You must begin your report with a general introduction based on the review papers provided. Such general introduction must describe the state-of-the-art of the use of networks in finance and particularly the importance of network analysis for the study of systemic risk and contagion in financial networks.
Working papers Each of you will read and analyze one of working papers. The list of the randomly assigned working paper is given the table below. You need to analyze your own working paper and introduce your understanding of the paper to others. This analysis should contain the following points in your language: A. The motivation: What did the paper look for? What is the research question and why it is important? B. The methods: How did the authors answer to the research question? Why they choose the methods? C. The results: What did the authors find, measure, derive, or analyze? D. The implications: So, what can we learn? With the results, what we can do?
Tips for the part 1 1 ) I understand that some papers may be difficult for you to understand. BUT DO NOT WORRY too much if you do not understand your paper perfectly. Please note that the points of your report are: A. To demonstrate the essence of your paper not the technical details. This means that you need to understand the motivation, the background, the importance, the methods, the main results, and the implications of your paper. B. To deliver your understanding to others in your language.
One way to understand the paper better is to read the related papers together. Normally you can find such related papers in the introduction of the paper.
Read the paper with your colleagues and explain to each other.
How to write the part 1 of Report
Write a report containing:
- General Introduction (based on review papers)
- Introduction (of the working paper) 3 ) Methods 4 ) Results 5 ) Discussion 6 ) Conclusions 7 ) References 8 ) Appendices (Anything you want to add)
Think like if you were explaining this paper to someone not familiar with the subject. In general introduction, describe the state-of-the-art of the use of networks in finance and in particular the importance of network analysis for the study of systemic risk and contagion in financial networks (in one page). In introduction, demonstrate what kind of problems the authors consider and why these problems are important. Describe the method of your research paper in the Methods in a clear and direct language and use the authors mathematical expressions if necessary. State clearly what are the results with figures and what these results imply. Discuss the results in a wider perspective. For example, what could we learn from this paper, what the results mean in finance, and what are the limitations of the paper. Make clear conclusions in one or two paragraphs. Conclusions are not a list of the topics that you have considered in your report but what you have learned from the analysis of this paper and what are the answers the authors asked in the introduction, which would be interesting for the readers. Refer to all the literatures that you have used, including webpages. The references must be properly cited in the text, e.g., using numbers. The list of references must include the authors, title of the paper, journal, volume, year and pages.
Note: If you think that other persons paper is really interesting to you and if the other person agrees, you can exchange the paper with the person. However, please let me know when you exchange the paper. Exchange is only possible until 23.59 pm 01/03/2018 (GMT).
Part 2: Analysis of network data
Please find the attached file (NetworkData.zip) on Myplace. Each of you will have one network data set. You can analyze this network data with your own codes or existing programs. Specify what you use in your report. Include any program or code used into the Appendices as well as any secondary information. If the code is taken from a given site please refers to it in the references. Otherwise make clear you have created this code.
For a given network:  Measure network size, number of links, average degree, the standard deviation of degree.  Plot degree distribution in linear-linear scale and in log-log scale.  Measure the average local clustering coefficient (Newmans) and plot the clustering coefficient as a function of degree (i.e., local clustering coefficient of nodes with the same degree k).  Plot the average nearest neighbors degree as function of degree (i.e. degree correlation function) and measure the Newmans assortativity coefficient (i.e., degree correlation coefficient). We will learn about this subject on 23/02/2018.  Demonstrate your codes or describe how to use your program to analyze the data.
The following figures illustrate how to plot, as an example. Here P(k) is the degree distribution. C(k) is the average clustering coefficient as a function of degree k. <Knn(k)> is the average nearest neighbors degree as function of degree k.
- The network data format: 2-columns, Undirected network): 1 2 (this means node 1 is connected to node 2) 1 3 (this means node 1 is connected to node 3) 3 4 …
- If there is 1 2 in the data, there will be also 2 1 because all the data are undirected one. But note that you need to consider 1 2 and 2 1 as a single link. Check your program before use because, depending on the codes you use, some codes may consider this case as two links.
About the programs to be used There are some codes available for manipulating and making calculations of parameters on the web. It is a non-exhaustive list of sites where you can find a few of them: a. http://strategic.mit.edu/downloads.php?page=matlab_networks b. http://igraph.org/redirect.html (python, R, C/C++) c. http://www.levmuchnik.net/Content/Networks/ComplexNetworksPackage.html d. http://www.mathstat.strath.ac.uk/outreach/contest/toolbox.html f. http://www.mathworks.com/matlabcentral/fileexchange/4266-grtheory-graph-theory-toolbox
- Please use font size 11 (or more).
- For the part 1, do not make the first part of the report too long (Without references and appendices, 5~6 pages are recommended)
- Start early and prepare the report with sufficient time. If you start the report just few days before the due date, it is really difficult to write a nice report.
- Before you analyze the network data, test your program with small artificial network you make. For example. If you have only two nodes with one link in the artificial data, you program should report you that there are two nodes and one link. Otherwise, your program is wrong.
The assignment of research papers and network data Name Working paper Network data Vyshnavi Singh Ananda Kumar Thakur 3 4 Sitian Chen 1 10 Annabel Lawson 6 1 Magnus Leivestad Hall 2 15 Yen-Ching Lin 9 6 Victoria McLean 14 8 Martin McPhail 16 5 Navatch Pumnoi 11 2 Sasa Qian 8 9 Murdo King Walker 4 7 Charlotte Weber 12 13 Guanyu Wu 13 3 Huaqi Wu 7 16 Yutong Yan 10 14 Shuai Yang 15 12 Qingzi Zeng 5 11