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Extent april2012-kostroma social-networks-socialmedia-trading

  1. 1. Social Networks, Social Media & Trading EXTENT Conference April 14, 2012, Kostroma, Russia
  2. 2. Instead of an introduction Source: http://kizzx2.com/blog/index.php/2011/01/18/why-we-shouldnt-care-too-much-about-being-right/
  3. 3. Agenda 1.What is social media? 2.What is a social network? 3.Why does social media matter? 4.Academic studies: quantification & analysis 5.Sentiment analysis & machine readable news 6.Corporate monitoring 7.Q & A
  4. 4. • What is Social Media? A variety of web-based platforms, applications and technologies that make it possible for people to interact with each other online Content is based on user participation and user-generated content, i.e. consumer-generated media: •Facebook •Twitter •LinkedIn •Google Plus •Seeking Alpha •Covestor •StockTwits •Etc.
  5. 5. m • What is a Social Network? relationships and flows between people, groups, organizations, computers or other information or knowledge processing entities (nodes) the network consists of o
  6. 6. • Why does social media matter? era of social Interactive media nature dominance Facebook: 70% of businesses 845 million have social monthly active media users at the presence end of (KPMG) December 2011. 483 million daily active users on average in December 2011. Available in more than 70 languages.
  7. 7. • Why does social media matter? Speed A NY-based data analysis provider: detects emerging activities on Twitter by monitoring the normal flow of tweets, and observing any impending aberration; alerts its clients
  8. 8. • Why does social media matter? Amplification Photograph by Mark Thiessen Source: http://environment.nationalgeographic.com/environment/natural-disasters/wildfires/
  9. 9. • ACADEMIC STUDIES – Quantification & Analysis Indiana University Research done by Professor Johan Bollen in 2010 suggested that the analysis of tweets to gauge public moods could help to reveal stock market trends and movements. This encouraged U.K. company Derwent Capital to create the so called Twitter Hedge fund, which during its first month of trading outperformed the established S&P 500 index.
  10. 10. • ACADEMIC STUDIES – Quantification & Analysis Pace University Can social media popularity reliably predict daily stock prices? The number of Facebook fans, Twitter followers and Youtube views were used as measures: keyword search trend data was tracked against daily stock price movements relative to an index of consumer stocks A correlation was found between daily popularity and stock price suggesting that social media popularity may be a lead indicator of stock price performance Starbucks, Coca Cola and Nike, over the course of 10 months in 2010-2011
  11. 11. • ACADEMIC STUDIES – Quantification & Analysis TUM School of Management, Munich 1) how does the content or information contained within stock micro-blogs reflect financial market developments? 2) are micro-blogging forums an efficient platform to weigh and aggregate information? Using methods of The sentiment of tweets is associated with abnormal computational linguistics stock returns and message volume to predict next-day trading volume. Analysis of ~ 250,000 stock-related micro- Users providing above average investment advice are re- blogging messages (tweets) tweeted more often and have more followers (i.e. on a daily basis. amplification!)
  12. 12. • ACADEMIC STUDIES – Quantification & Analysis Purdue University How does peer-based advice transmitted through social media affect the stock market? Textual analysis of articles published on Seeking Alpha. Views expressed in articles associate strongly with current and near-future stock returns. The effect is stronger for articles that receive more attention and for companies likely to be neglected by traditional advice sources. The importance of social media as both a source of peer-based advice and a channel through which views become reflected in stock prices. www.seekingalpha.com
  13. 13. • Sentiment Analysis Companies apply complex algorithms to measure a variety of sentiment trends: What is the mood of the entire consumer marketplace? Are there positive or negative emotions / opinions regarding a specific brand or stock? Some social media streams make it possible to gather such information real-time: www.stocktwits.com
  14. 14. • Machine Readable News Thomson Reuters News Analytics (TRNA) for Internet news and social media that allows users to analyze internet content, tag and filter that content to focus on the most relevant sources, and turn the data into actionable analytics to support trading by providing improved buy/hold/sell signals within milliseconds. Powered by language processing system from linguistics technology provider Lexalytics, a software company specializing in text and sentiment analysis for social media monitoring and reputation management. By enabling organizations to make sense of the vast content repositories on sources like Twitter, blogs, forums, web sites and in-house documents, Lexalytics provides the context necessary for informed critical business decisions. www.lexalytics.com - text analysis software
  15. 15. • Machine Readable News www.lexalytics.com - text analysis software
  16. 16. • Machine Readable News www.lexalytics.com - text analysis software
  17. 17. • Machine Readable News www.lexalytics.com - text analysis software
  18. 18. • Corporate Social Media Monitoring Social 360 - www.social360monitoring.com •Social Media monitoring technology •Monitors social media platforms •Use communication professionals to analyze search results •Provide clients with reports Clients include: •BP •Old Mutual •LSEG – since January 2012 •Etc.
  19. 19. • Questions & Answers Thank you! Source: http://i.zdnet.com/blogs/twitter-downtime-and-life-at-home.jpg

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