Can social mentions influence stock prices?
Can social mentions influence stock prices?
by
Join the DZone community and get the full member experience.
Join For Free
Stock trading is a pretty advanced process now, with many traders using algorithms to either advise them or in a rising number of cases, to actually do the trading for them. Most of these algorithms are logical however, in that they use hard mathematics to produce their recommendations. Can social media sentiment analysis play a part in this?
That's the question that the New York Stock Exchange hope to answer. They announced recently that they are teaming up with Social Market Analytics (SMA) to distribute sentiment statistics from SMAs social monitoring tool through the NYSE data feed.
“Higher social media performance scores were associated with positive changes in share price,” Sociagility said in a statement.
“Of course, many more data points would be required to determine whether or not this represents a real or consistent lead indicator,” the report cautions. “However, the presence of any such statistically significant correlations between social media performance and share price movements should certainly embolden corporate communications directors to go to their CEOs and CFOs and say: ‘Look, this matters, and I need more resources to do it properly.’”
That study was of course measuring how social management correlates to strong share performance. So it wasn't looking at social signals per se. That said however, social mentions have been used to track flu and other epidemics, so it will be interesting to see if social can also provide an indicator into the hive nature of stock trading.
Like This Article? Read More From DZone
Opinions expressed by DZone contributors are their own.
{{ parent.title || parent.header.title}}
{{ parent.tldr }}
{{ parent.linkDescription }}
{{ parent.urlSource.name }}