Wall Street in New York is the home of the New York Stock Exchange. An army of mathematicians are employed there to analyze and predict the stock price variations. Their employers can potentially earn millions of dollars based on their predictions about which way the prices will jump.
Mathematicians however say that stock markets follow a random walk. This means that unless some spectacular event occurs, the prices have the same chances of decreasing and increasing at the end of any day. If patterns do exist, they will be elusive and difficult to find, which is why financial mathematicians are paid huge sums.
Some of the intricate mathematics used for stock market analyses can be traced back to Einstein. He developed the fluctuation-dissipation theorem to explain the random movement of particles found in liquids or gases.
This movement called ‘Brownian motion’ was first observed by the Scottish biologist Robert Brown. Brownian motion is highly similar to the price fluctuations seen in stock markets. The similarity was observed in 1970 and since then it has been used on Wall Street. Einstein’s paper on Brownian motion is still used as the basis for certain stock market predictions.
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Einstein’s General Theory of Relativity has predominantly found applications in astronomy through gravity waves, big bangs and black holes. One of its rather unexpected applications was in the multi-billion-dollar industry centred around the Global Positioning System (GPS).
All GPS navigators including Google Maps work by measuring the distance from one point on Earth to one of the satellites orbiting our planet. Though GPS was originally developed with military use in mind, it has since become an inherent part of everyday life.
GPS is based on a collection of 24 satellites, each carrying a precise atomic clock. A hand-held GPS receiver which detects radio emissions from any satellite overhead can find the latitude, longitude and altitude with accuracy up to 15 metres and local time to 50 billionths of a second. The clocks on satellites are ahead of those on Earth by 38,000 nanoseconds. The reason for this is explained by the General Theory of Relativity. Though it may appear as an inconsequential amount of time, if these nanoseconds are not taken into account, GPS systems would be highly inaccurate.
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Wednesday, February 24. 2021
Einstein received a paper from Indian scientist Satyendra Nath Bose in 1924. The paper was on a new perspective: to think of light as a gas filled with indistinguishable particles. Einstein recognized the relevance of the paper. He translated it to German and submitted it on behalf of Bose to the famous journal Zeitschrift fur Physik. Bose went to Europe and worked with Einstein at the X-ray and crystallography laboratories there.
Einstein worked with Bose to extend his idea to atoms and they predicted a new state of matter which came to be called the Bose-Einstein Condensate. A Bose-Einstein Condensate is a dense collection of particles with integer spin known as Bosons.
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