Correlated Collapse: How Synchronized Trading Algorithms Amplify Market Instability Through Constructive Interference
When dozens of independent algorithmic trading systems converge on identical predictions, the resulting behavior bears a striking resemblance to constructive wave interference — amplitudes stack, feedback loops intensify, and the composite signal overwhelms the underlying fundamentals. This article examines the physics-informed framework that financial engineers and regulators are increasingly applying to understand why synchronized AI models do not merely correlate with market crashes, but mech