The following is an excerpt from Dr. John Bates’ recent commentary on Huffington Post, which discusses Twitter’s ability to predict financial market sentiment.
Another firm has jumped on the Twitter sentiment bandwagon; Topsy Labs is planning to release a Twitter trading tool to investors later this year. Topsy follows U.K. hedge fund Derwent Capital, which launched a fund last year using a Twitter algo that claims to predict market direction three or four days in advance with nearly 88% accuracy. And U.S. firm Wall Street Birds, which offers a free service for investors to use to make investment decisions based on the analysis of social media data. (It has become so popular that to sign up you must get invited by an existing user.)
But are emotionally laden Twitter messages able to provide reliable bellwethers for market sentiment? As I said in an interview with Advanced Trading in April, I think you can use a Twitter algo to get a sentiment reading on particular topics, but by the time you've got the information it is more of a trailing indicator rather than a leading indicator.
Read the full post from Dr. Bates here.
View all posts from The Progress Team on the Progress blog. Connect with us about all things application development and deployment, data integration and digital business.
Copyright © 2018 Progress Software Corporation and/or its subsidiaries or affiliates.
All Rights Reserved.
Progress, Telerik, and certain product names used herein are trademarks or registered trademarks of Progress Software Corporation and/or one of its subsidiaries or affiliates in the U.S. and/or other countries. See Trademarks for appropriate markings.