Twitter, Social Sentiment and Stock Markets

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Twitter provides an incredible wealth of real-time information and public opinion on breaking news for companies, stocks and industries. The challenge is, how can you tap into this stream of information to help identify trends to support trading decisions.

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Twitter, Social Sentiment and Stock Markets

  1. 1. Social Sentiment& Stock MarketsThe canary in thecoalmine Research In Motion Case Study
  2. 2. Testing the correlation between Public Sentiment on Twitter and Stock Price DataSift provides funds with new data and insights to drive trading decisions Sentiment and Semantic analysis can be used to identify real-time trends and swings in sentiment towards stocks, industries and news. Example correlation between negative spike in sentiment and price decline for DJI index-price on 17-Jan-2012Social Media Content AnalysisDow Jones 2012-01-17 (15 minute time frame)
  3. 3. Case in Point: Research-In-Motion (Blackberry) Jan 21 - RIM’s co-CEOs announce resignation Mentions of RIM surge on Announcement Twitter of Resignation Sentiment of Tweets mostly pessimistic Spike in negative sentiment RIM Social Media Content (1 hour time frame)
  4. 4. A Global Topic of ConversationWhich countries did the Tweets come from? Canada 30% UK 20% USA 30% APAC 10%
  5. 5. Markets Open – as expected, RIM TumblesRIM Social Media Content (15 minute time frame) ①  Surprising spike of positive sentiment at beginning of trading hours (14:30 UCT) ②  ②  As expected, RIM stock price drops on market- opening ① 
  6. 6. Stock price declines for 20 mins, but social sentiment turns-around– 5 minutes later, stock reaches support level 1. As expected Stock Declines 2. Sentiment Inflection Point Sentiment on Twitter ①  Stock declines switches to positive value around 14:45(09:45 ECT), despite price still falling. 5 min latter the stock price reaches the support level at 15.88. 3. Support Level ③  Support Tested ②  Sentiment Inflection Level This level is tested again Point Tested after 15:20 and holds, as the sentiment of social media content remain positive.
  7. 7. DataSift – a powerful platform for creating insights from social media To help make sense from social data, DataSift can aggregate data by: Geographic location Timezone Authors social influence Social media platform (Klout score) Gender Number of followers and up to 160 other categories... Language
  8. 8. Social Influencers were good canaries RIM Social Media Content (Klout Score above 40)8
  9. 9. To learn more visit www.datasift.com/ finance

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