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Dec 23

Twitter Can Predict The Stock Market

Posted by abiao at 20:21 | Others | Comments(0) | Reads(11152)
One of the hottest discussion these days is Twitter can predict the stock market, research that suggested Twitter could be used to predict movements in the stock market is set to be put to the test with millions of pounds of real money. Not only Twitter, but Google trend searches may be used to predict market sentiment. For instance, the below graph plots the  Google Finance & Insurance Index queries related to "bank, bank of america, stock, chase, yahoo" and so forth, against the performance of NASDAQ, they are surprisingly highly negatively correlated.
google trends against stock market

Read the paper "Twitter mood predicts the stock market" @ http://arxiv.org/abs/1010.3003, where the author find an accuracy of 87.6% in predicting the daily up and down changes in the closing values of the Dow Jones Industrial Average and a reduction of the Mean Average Percentage Error by more than 6% by the inclusion of specific public twitter mood dimensions.


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