Exercise 3.6. Design a property graph schema for a causal graph for investing. Your design should take into account the following domain knowledge.

In investing, headwind and tailwind are metaphors used to describe the factors that could cause a difference to the performance of a stock.

A headwind is any specific company, market or economic factor that could causally hinder a company's growth, or reduce its profitability, in the near future. These could include things like increased competition, regulatory changes, unfavorable economic conditions, or any other causal factor that makes it more difficult for the company to succeed. If a stock is facing headwinds, it means it is encountering challenges that could potentially lower its value in the near future.

On the other hand, a tailwind refers to any such factor that could causally boost the company's growth or increase its profitability. These could include things like favorable economic conditions, beneficial regulatory changes, or a successful new product launch. A stock with tailwinds is benefiting from positive conditions or events that are causally responsible for an increase in its value in the near future.

Headwinds and tailwinds should be unitary in nature, i.e., not decomposable into more specific assertions. For example, Company is facing increasing competition, and is having difficulty hiring critical talent should be decomposed into two distinct headwinds.

The factors that do not causally affect company performance cannot be headwinds or tailwinds. Examples of factors that are not headwinds or tailwinds:

• valuations (factors that lead to high or low valuations may be candidate head/tail winds)
• observations of company performance improvement
• analyst perceptions -- e.g., uncertainity in an analyst's predictions, or variances in thier views
• one-off factors that affected performance in last quarter, but will not have an impact in future quarters

A headwind / tailwind should have four well-defined attributes:

• materiality: possible values -- mild, medium, high. Measures whether this factor is expected to have a material impact on company performance. For instance, materiality is low for factors that will affect only a small portion of company business.
• duration: possible values -- short (1-2 quarters), medium (3-5 quarters), long (more than 5 quarters). It measures expected duration of this factor.
• externality: possible values -- true, false or both. If the factor external to (not controlled by) the company then the externality is true. The factor is false if the company controls the factor. Its value is both if the factor may be both internally and externally controlled.
• obviousness: possible values -- low, medium, or high. Measures how strongly does an analyst believe in the effect of the parameter.

Sample Solution