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Twitter mood predicts the stock market.

  • kokoroanalytics
  • Aug 18, 2021
  • 1 min read


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Researchers from the School of Informatics and Computing at Indiana University found a correlation in social media and the Dow Jones Industrial Average over time.



From the abstract and summary:

"Behavioral economics tells us that emotions can profoundly affect individual behavior and decision-making. Does this also apply to societies at large, i.e. can societies experience mood states that affect their collective decision making? By extension is the public mood correlated or even predictive of economic indicators?


"Public mood states along 7 different dimensions of mood are measured from the text content of large-scale Twitter feeds. Daily variations in public mood states show statistically significant correlation to daily changes in Dow Jones Industrial Average closing values. Certain dimensions of public mood states, in particular Calm, increase the accuracy of a Self Organizing Fuzzy Neural Network model in predicting up and down changes in DJIA closing values to 87.6%."


 
 
 

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