Coronavirus Update: February 28, 2020
Our research team recently created a model to predict the spread of the coronavirus outside of China. The model was finalized on Friday, February 21, and we continue to update it with new data. Thus far, it is tracking correctly. There are three known wild cards that can affect the model.
- Will the virus spread in warmer temperatures? If it is like the flu, it will start to die off in April.
- The hopeful creation and distribution of a vaccine
- The rate of transmission after explicit or self-imposed quarantines goes into effect
Cases of the coronavirus outside of China have been increasing exponentially as a function of time. Data from the official Johns Hopkins repository (https://github.com/CSSEGISandData/COVID-19) can be modeled very well so far using an exponential regression (R2=0.9946). This simple regression predicts that there will be an increase of 1 order of magnitude in the number of ex-China cases roughly once every 20 calendar days. This would bring the total number of ex-China cases to more than 10K within 20 days and more than 100K within 40 days.
On a professional level, hedges on risk assets are probably a good trade. On a personal level, stocking up on flu medicines and other supplies would be prudent.