Sunday, April 24, 2016

AIM Students Worked With Social Media This Semester - It Continues to Grow in Importance

Image result for twitter logo

AIM students learned this semester about ‘Big Data Analytics’ and how to use it to conduct fundamental stock analysis - it can be used for macro-economics too... read on!

Trade The Fed With Twitter

  • – Andrew Lo Study Says Twitter Can Help You Trade Fed Meetings
    It looked at sentiment `polarity’ in days before the FOMC met
    Researchers found a predictable enhancement of returns

    In the social media cacophony, some of the noise rises to the level of stock market signal. That’s the finding of a working paper overseen by Massachusetts Institute of Technology’s Andrew Lo, which says a trading strategy based on views posted on Twitter prior to Federal Reserve policy meetings regularly turned a profit. A one-standard-deviation increase in tweet sentiment can be exploited to boost Fed-day equity returns by 0.62 percent, it found. Quant investors have been obsessed for years with pulling signals out of social media, where roughly 1.8 billion active users opine in real time on everything from tech valuations to celebrity breakups. The MIT study, which examined 3.9 million tweets over seven years, joins an expanding pool of research examining topics such as the role of tweets in market volatility and the accuracy of crowd-sourced earnings estimates.