Together Everyone Achieves More? Herding Behavior in the Finnish Stock Market

This thesis examines whether or not Finnish stock markets has herding behavior. Sample data is from 2004 to 2013. Including total of 2516 market days. Market wide herding, up and down market herding, extreme price movement herding and turnover volume herding are measured in this thesis. Methods used in this thesis are cross-sectional absolute dispersion and cross-sectional standard deviation. This thesis found no signs of herding in the Finnish stock market.

Portfolio Selection via Composite Measure Analysis: Evidence from the U.S. Stock Market

The aim of this research is to examine the pricing anomalies existing in the U.S. market during 1986 to 2011. The sample of stocks is divided into decile portfolios based on seven individual valuation ratios (E/P, B/P, S/P, EBIT/EV, EVITDA/EV, D/P, and CE/P) and price momentum to investigate the efficiency of individual valuation ratio and their combinations as portfolio formation criteria. This is the first time in financial literature when CE/P is employed as a constituent of composite value measure. The combinations are based on median scaled composite value measures and TOPSIS method. During the sample period value portfolios significantly outperform both the market portfolio and comparable glamour portfolios. The results show the highest return for the value portfolio that was based on the combination of S/P & CE/P ratios. The outcome of this research will increase the understanding on the suitability of different methodologies for portfolio selection. It will help managers to take advantage of the results of different methodologies in order to gain returns above the market.

Stability of Natural Colorants of Plant Origin

In recent years, there have been studies that show a correlation between the hyperactivity of children and use of artificial food additives, including colorants. This has, in part, led to preference of natural products over products with artificial additives. Consumers have also become more aware of health issues. Natural food colorants have many bioactive functions, mainly vitamin A activity of carotenoids and antioxidativity, and therefore they could be more easily accepted by the consumers. However, natural colorant compounds are usually unstable, which restricts their usage. Microencapsulation could be one way to enhance the stability of natural colorant compounds and thus enable better usage for them as food colorants. Microencapsulation is a term used for processes in which the active material is totally enveloped in a coating or capsule, and thus it is separated and protected from the surrounding environment. In addition to protection by the capsule, microencapsulation can also be used to modify solubility and other properties of the encapsulated material, for example, to incorporate fat-soluble compounds into aqueous matrices. The aim of this thesis work was to study the stability of two natural pigments, lutein (carotenoid) and betanin (betalain), and to determine possible ways to enhance their stability with different microencapsulation techniques. Another aim was the extraction of pigments without the use of organic solvents and the development of previously used extraction methods. Stability of pigments in microencapsulated pigment preparations and model foods containing these were studied by measuring the pigment content after storage in different conditions. Preliminary studies on the bioavailability of microencapsulated pigments and sensory evaluation for consumer acceptance of model foods containing microencapsulated pigments were also carried out. Enzyme-assisted oil extraction was used to extract lutein from marigold (Tagetes erecta) flower without organic solvents, and the yield was comparable to solvent extraction of lutein from the same flowers. The effects of temperature, extraction time, and beet:water ratio on extraction efficiency of betanin from red beet (Beta vulgaris) were studied and the optimal conditions for maximum yield and maximum betanin concentration were determined. In both cases, extraction at 40 °C was better than extraction at 80 °C and the extraction for five minutes was as efficient as 15 or 30 minutes. For maximum betanin yield, the beet:water ratio of 1:2 was better, with possibly repeated extraction, but for maximum betanin concentration, a ratio of 1:1 was better. Lutein was incorporated into oil-in-water (o/w) emulsions with a polar oil fraction from oat (Avena sativa) as an emulsifier and mixtures of guar gum and xanthan gum or locust bean gum and xanthan gum as stabilizers to retard creaming. The stability of lutein in these emulsions was quite good, with 77 to 91 percent of lutein being left after storage in the dark at 20 to 22°C for 10 weeks whereas in spray dried emulsions the retention of lutein was 67 to 75 percent. The retention of lutein in oil was also good at 85 percent. Betanin was incorporated into the inner w1 water phase of a water1-in-oil-inwater2 (w1/o/w2) double emulsion with primary w1/o emulsion droplet size of 0.34 μm and secondary w1/o/w2 emulsion droplet size of 5.5 μm and encapsulation efficiency of betanin of 89 percent. In vitro intestinal lipid digestion was performed on the double emulsion, and during the first two hours, coalescence of the inner water phase droplets was observed, and the sizes of the double emulsion droplets increased quickly because of aggregation. This period also corresponded to gradual release of betanin, with a final release of 35 percent. The double emulsion structure was retained throughout the three-hour experiment. Betanin was also spray dried and incorporated into model juices with different pH and dry matter content. Model juices were stored in the dark at -20, 4, 20–24 or 60 °C (accelerated test) for several months. Betanin degraded quite rapidly in all of the samples and higher temperature and a lower pH accelerated degradation. Stability of betanin was much better in the spray dried powder, with practically no degradation during six months of storage in the dark at 20 to 24 °C and good stability also for six months in the dark at 60 °C with 60 percent retention. Consumer acceptance of model juices colored with spray dried betanin was compared with similar model juices colored with anthocyanins or beet extract. Consumers preferred beet extract and anthocyanin colored model juices over juices colored with spray dried betanin. However, spray dried betanin did not impart any off-odors or off-flavors into the model juices contrary to the beet extract. In conclusion, this thesis describes novel solvent-free extraction and encapsulation processes for lutein and betanin from plant sources. Lutein showed good stability in oil and in o/w emulsions, but slightly inferior in spray dried emulsions. In vitro intestinal lipid digestion showed a good stability of w1/o/w2 double emulsion and quite high retention of betanin during digestion. Consumer acceptance of model juices colored with spray dried betanin was not as good as model juices colored with anthocyanins, but addition of betanin to real berry juice could produce better results with mixture of added betanin and natural berry anthocyanins could produce a more acceptable color. Overall, further studies are needed to obtain natural colorants with good stability for the use in food products.

Do retail investors use technical analysis? Evidence from Stuttgart stock exchange.

Tutkielma käyttää automaattista kuviontunnistusalgoritmia ja yleisiä kahden liukuvan keskiarvon leikkauspiste –sääntöjä selittääkseen Stuttgartin pörssissä toimivien yksityissijoittajien myynti-osto –epätasapainoa ja siten vastatakseen kysymykseen ”käyttävätkö yksityissijoittajat teknisen analyysin menetelmiä kaupankäyntipäätöstensä perustana?” Perusolettama sijoittajien käyttäytymisestä ja teknisen analyysin tuottavuudesta tehtyjen tutkimusten perusteella oli, että yksityissijoittajat käyttäisivät teknisen analyysin metodeja. Empiirinen tutkimus, jonka aineistona on DAX30 yhtiöiden data vuosilta 2009 – 2013, ei tuottanut riittävän selkeää vastausta tutkimuskysymykseen. Heikko todistusaineisto näyttää kuitenkin osoittavan, että yksityissijoittajat muuttavat kaupankäyntikäyttäytymistänsä eräiden kuvioiden ja leikkauspistesääntöjen ohjastamaan suuntaan.

Important amino acid residues of potato plant uncoupling protein (StUCP)

Chemical modifications were used to identify some of the functionally important amino acid residues of the potato plant uncoupling protein (StUCP). The proton-dependent swelling of potato mitochondria in K+-acetate in the presence of linoleic acid and valinomycin was inhibited by mersalyl (Ki = 5 µM) and other hydrophilic SH reagents such as Thiolyte MB, iodoacetate and 5,5'-dithio-bis-(2-nitrobenzoate), but not by hydrophobic N-ethylmaleimide. This pattern of inhibition by SH reagents was similar to that of brown adipose tissue uncoupling protein (UCP1). As with UCP1, the arginine reagent 2,3-butadione, but not N-ethylmaleimide or other hydrophobic SH reagents, prevented the inhibition of StUCP-mediated transport by ATP in isolated potato mitochondria or with reconstituted StUCP. The results indicate that the most reactive amino acid residues in UCP1 and StUCP are similar, with the exception of N-ethylmaleimide-reactive cysteines in the purine nucleotide-binding site.

Time Varying Conditional Correlation Between Stock And Bond Returns: Evidence From CIVETS Nations

This thesis estimates long-run time variant conditional correlation between stock and bond returns of CIVETS (Colombia, Indonesia, Vietnam, Egypt, Turkey, and South Africa) nations. Further, aims to analyse the presence of asymmetric volatility effect in both asset returns, as well as, obverses increment or decrement in conditional correlation during pre-crisis and crisis period, which lead to make a reliable diversification decision. The Constant Conditional Correlation (CCC) GARCH model of Bollerslev (1990), the Dynamic Conditional Correlation (DCC) GARCH model (Engle 2002), and the Asymmetric Dynamic Conditional Correlation (ADCC) GARCH model of Cappiello, Engle, and Sheppard (2006) were implemented in the study. The analyses present strong evidence of time-varying conditional correlation in CIVETS markets, excluding Vietnam, during 2005-2013. In addition, negative innovation effects were found in both conditional variance and correlation of the asset returns. The results of this study recommend investors to include financial assets from these markets in portfolios, in order to obtain better stock-bond diversification benefits, especially during high volatility periods.

Forecasting financial weather - can we foresee market sentiment? Spectrum of stock price behavior - NYSE case study

The desire to create a statistical or mathematical model, which would allow predicting the future changes in stock prices, was born many years ago. Economists and mathematicians are trying to solve this task by applying statistical analysis and physical laws, but there are still no satisfactory results. The main reason for this is that a stock exchange is a non-stationary, unstable and complex system, which is influenced by many factors. In this thesis the New York Stock Exchange was considered as the system to be explored. A topological analysis, basic statistical tools and singular value decomposition were conducted for understanding the behavior of the market. Two methods for normalization of initial daily closure prices by Dow Jones and S&P500 were introduced and applied for further analysis. As a result, some unexpected features were identified, such as a shape of distribution of correlation matrix, a bulk of which is shifted to the right hand side with respect to zero. Also non-ergodicity of NYSE was confirmed graphically. It was shown, that singular vectors differ from each other by a constant factor. There are for certain results no clear conclusions from this work, but it creates a good basis for the further analysis of market topology.

Regime-Switching in the Impact of Oil Price Shocks on Stock Market Volatility: Evidence from Oil-Importing and Oil-Exporting Countries

Research has highlighted the adequacy of Markov regime-switching model to address dynamic behavior in long term stock market movements. Employing a purposed Extended regime-switching GARCH(1,1) model, this thesis further investigates the regime dependent nonlinear relationship between changes in oil price and stock market volatility in Saudi Arabia, Norway and Singapore for the period of 2001-2014. Market selection is prioritized to national dependency on oil export or import, which also rationalizes the fitness of implied bivariate volatility model. Among two regimes identified by the mean model, high stock market return-low volatility regime reflects the stable economic growth periods. The other regime characterized by low stock market return-high volatility coincides with episodes of recession and downturn. Moreover, results of volatility model provide the evidence that shocks in stock markets are less persistent during the high volatility regime. While accelerated oil price rises the stock market volatility during recessions, it reduces the stock market risk during normal growth periods in Singapore. In contrast, oil price showed no significant notable impact on stock market volatility of target oil-exporting countries in either of the volatility regime. In light to these results, international investors and policy makers could benefit the risk management in relation to oil price fluctuation.

Differential effect of plant lectins on mast cells of different origins

Histamine release induced by plant lectins was studied with emphasis on the carbohydrate specificity, external calcium requirement, metal binding sites, and mast cell heterogeneity and on the importance of antibodies bound to the mast cell membrane to the lectin effect. Peritoneal mast cells were obtained by direct lavage of the rat peritoneal cavity and guinea pig intestine and hamster cheek pouch mast cells were obtained by dispersion with collagenase type IA. Histamine release was induced with concanavalin A (Con A), lectins from Canavalia brasiliensis, mannose-specific Cymbosema roseum, Maackia amurensis, Parkia platycephala, Triticum vulgaris (WGA), and demetallized Con A and C. brasiliensis, using 1-300 µg/ml lectin concentrations applied to Wistar rat peritoneal mast cells, peaking on 26.9, 21.0, 29.1, 24.9, 17.2, 10.7, 19.9, and 41.5%, respectively. This effect was inhibited in the absence of extracellular calcium. The lectins were also active on hamster cheek pouch mast cells (except demetallized Con A) and on Rowett nude rat (animal free of immunoglobulins) peritoneal mast cells (except for mannose-specific C. roseum, P. platycephala and WGA). No effect was observed in guinea pig intestine mast cells. Glucose-saturated Con A and C. brasiliensis also released histamine from Wistar rat peritoneal mast cells. These results suggest that histamine release induced by lectins is influenced by the heterogeneity of mast cells and depends on extracellular calcium. The results also suggest that this histamine release might occur by alternative mechanisms, because the usual mechanism of lectins is related to their binding properties to metals from which depend the binding to sugars, which would be their sites to bind to immunoglobulins. In the present study, we show that the histamine release by lectins was also induced by demetallized lectins and by sugar-saturated lectins (which would avoid their binding to other sugars). Additionally, the lectins also released histamine from Rowett nude mast cells that are free of immunoglobulins.

Dynamic linkages of real estate and stock markets in Finland

Traditionally real estate has been seen as a good diversification tool for a stock portfolio due to the lower return and volatility characteristics of real estate investments. However, the diversification benefits of a multi-asset portfolio depend on how the different asset classes co-move in the short- and long-run. As the asset classes are affected by the same macroeconomic factors, interrelationships limiting the diversification benefits could exist. This master’s thesis aims to identify such dynamic linkages in the Finnish real estate and stock markets. The results are beneficial for portfolio optimization tasks as well as for policy-making. The real estate industry can be divided into direct and securitized markets. In this thesis the direct market is depicted by the Finnish housing market index. The securitized market is proxied by the Finnish all-sectors securitized real estate index and by a European residential Real Estate Investment Trust index. The stock market is depicted by OMX Helsinki Cap index. Several macroeconomic variables are incorporated as well. The methodology of this thesis is based on the Vector Autoregressive (VAR) models. The long-run dynamic linkages are studied with Johansen’s cointegration tests and the short-run interrelationships are examined with Granger-causality tests. In addition, impulse response functions and forecast error variance decomposition analyses are used for robustness checks. The results show that long-run co-movement, or cointegration, did not exist between the housing and stock markets during the sample period. This indicates diversification benefits in the long-run. However, cointegration between the stock and securitized real estate markets was identified. This indicates limited diversification benefits and shows that the listed real estate market in Finland is not matured enough to be considered a separate market from the general stock market. Moreover, while securitized real estate was shown to cointegrate with the housing market in the long-run, the two markets are still too different in their characteristics to be used as substitutes in a multi-asset portfolio. This implies that the capital intensiveness of housing investments cannot be circumvented by investing in securitized real estate.

Intensification of Operation of Inclined Plate Settler at Fertilizer Plant

Fertilizer plant’s process waters contain high concentrations of nitrogen compounds, such as ammonium and nitrate. Phosphorus and fluorine, which originate from phosphoric acid and rock phosphate (apatite) used in fertilizer production, are also present. Phosphorus and nitrogen are the primary nutrients causing eutrophication of surface waters. At fertilizer plant process waters are held in closed internal circulation. In a scrubber system process waters are used for washing exhaust gases from fertilizer reactors and dry gases from granulation drums as well as for cooling down the fertilizer slurry in neutralization reactor. Solids in process waters are separated in an inclined plate settler by gravitational sedimentation. However, the operation of inclined plate settler has been inadequate. The aim of this thesis was to intensify the operation of inclined plate settler and thus the solids separation e.g. through coagulation and/or flocculation process. Chemical precipitation was studied to reduce the amount of dissolved species in process waters. Specific interest was in precipitation of nitrogen, phosphorus, and fluorine containing specimens. Amounts of phosphorus and fluorine were reduced significantly by chemical precipitation. When compared to earlier studies, annual chemical costs were almost eight times lower. Instead, nitrogen compounds are readily dissolved in water, thus being difficult to remove by precipitation. Possible alternative techniques for nitrogen removal are adsorption, ion exchange, and reverse osmosis. Settling velocities of pH adjusted and flocculated process waters were sufficient for the operation of inclined plate settler. Design principles of inclined plate settler are also presented. In continuation studies, flow conditions in inclined plate settler should be modelled with computational fluid dynamics and suitability of adsorbents, ion exchange resins, and membranes should be studied in laboratory scale tests.

Optimization of a dynamic district heating power plant

The purpose of this Thesis is to find the most optimal heat recovery solution for Wärtsilä’s dynamic district heating power plant considering Germany energy markets as in Germany government pays subsidies for CHP plants in order to increase its share of domestic power production to 25 % by 2020. Different heat recovery connections have been simulated dozens to be able to determine the most efficient heat recovery connections. The purpose is also to study feasibility of different heat recovery connections in the dynamic district heating power plant in the Germany markets thus taking into consideration the day ahead electricity prices, district heating network temperatures and CHP subsidies accordingly. The auxiliary cooling, dynamical operation and cost efficiency of the power plant is also investigated.

Plant-Herbivore Interaction in a Fragmented Landscape: Local Adaptation and Inbreeding

Reciprocal selection between interacting species is a major driver of biodiversity at both the genetic and the species level. This reciprocal selection, or coevolution, has led to the diversification of two highly diverse and abundant groups of organisms, flowering plants and their insect herbivores. In heterogeneous environments, the outcome of coevolved species interactions is influenced by the surrounding community and/or the abiotic environment. The process of adaptation allows species to adapt to their local conditions and to local populations of interacting species. However, adaptation can be disrupted or slowed down by an absence of genetic variation or by increased inbreeding, together with the following inbreeding depression, both of which are common in small and isolated populations that occur in fragmented environments. I studied the interaction between a long-lived plant Vincetoxicum hirundinaria and its specialist herbivore Abrostola asclepiadis in the southwestern archipelago of Finland. I focused on mutual local adaptation of plants and herbivores, which is a demonstration of reciprocal selection between species, a prerequisite for coevolution. I then proceeded to investigate the processes that could potentially hamper local adaptation, or species interaction in general, when the population size is small. I did this by examining how inbreeding of both plants and herbivores affects traits that are important for interaction, as well as among-population variation in the effects of inbreeding. In addition to bi-parental inbreeding, in plants inbreeding can arise from self-fertilization which has important implications for mating system evolution. I found that local adaptation of the plant to its herbivores varied among populations. Local adaptation of the herbivore varied among populations and years, being weaker in populations that were most connected. Inbreeding caused inbreeding depression in both plants and herbivores. In some populations inbreeding depression in herbivore biomass was stronger in herbivores feeding on inbred plants than in those feeding on outbred ones. For plants it was the other way around: inbreeding depression in anti-herbivore resistance decreased when the herbivores were inbred. Underlying some of the among-population variation in the effects of inbreeding is variation in plant phenolic compounds. However, variation in the modification of phenolic compounds in the digestive tract of the herbivore did not explain the inbreeding depression in herbivore biomass. Finally, adult herbivores had a preference for outbred host plants for egg deposition, and herbivore inbreeding had a positive effect on egg survival when the eggs were exposed to predators and parasitoids. These results suggest that plants and herbivores indeed exert reciprocal selection, as demonstrated by the significant local adaptation of V. hirundinaria and A. asclepiadis to one another. The most significant cause of disruption of the local adaptation of herbivore populations was population connectivity, and thus probably gene flow. In plants local adaptation tended to increase with increasing genetic variation. Whether or not inbreeding depression occurred varied according to the life-history stage of the herbivore and/or the plant trait in question. In addition, the effects of inbreeding strongly depended on the population. Taken together, inbreeding modified plant-herbivore interactions at several different levels, and can thus affect the strength of reciprocal selection between species. Thus inbreeding has the potential to affect the outcome of coevolution.

Developing construction site operations for EPC power plant projects

The purpose of this thesis is to find development areas for site operations in power plant construction projects delivered by Wärtsilä. The inspected operations are subcontractor management, site material management and work scheduling. The contractor's role in EPC project is to respond for engineering, procurement, and construction supervision. Geographical and cultural differences brings challenges for finding development areas as Wärtsilä delivers projects world-wide. Searching for development area is mainly made with survey, which answers were collected from the target company's site personnel. Based on the results, with good planning and preparation various problems would be avoided. An external view for the thesis was collected by an expert interview, which was held to three expe-rienced construction operating executives. Interviewees believed that with the se-lection of right site personnel and clearly defined areas of responsibility will great-ly affect the outcome of the project. Some of the theory has been collected from areas, which have helped to under-stand the inspected operations on site. Improving competence knowledge has been important due to the broad scope of work and the author’s inexperience of the topic. Also generally effective practices from construction projects has been col-lected to the theory part. Functionality of general practices have been reflected together with the results of empirically collected data for Wärtsilä's projects. As a result, a model was generated where development proposals and the benefits from new procedures were presented.

Ellagitannins in Finnish plant species – Characterization, distribution and oxidative activity

Ellagitannins are secondary metabolites that are produced by plants. Among other features, they are assumed to function as plants’ defensive compounds against plant-eating herbivores. This thesis focuses on a theory, which suggests that the biological activity of ellagitannins is based on their tendency to oxidize at the highly alkaline gut conditions of insect herbivores (oxidative activity). To study the biological activities of ellagitannins, a wide variety of structurally different ellagitannins were purified from different plant species by using liquid chromatographic techniques. The structures were characterized with the aid of spectrometric methods. Based on the acquired data, it was also possible to create a scheme, which enables the classification and even identification of ellagitannins from plant extracts without the need to isolate each compound for individual characterization. The biological activities of ellagitannins were determined with methods that are based on the abilities of the compounds to scavenge radicals, chelate iron ions, and on their rate of oxidation at high pH. The results showed that ellagitannins possess oxidative activities both at high and neutral pH, and that their activities depend on structure. The occurrence, distribution and content of ellagitannins in Finnish plant species were also studied. The specific ellagitannin profiles of the studied plant species were found to correlate well with their taxonomic classification.