Social Media

is changing the rules

"A trading strategy based on the model created by Vagelis Hristidis, an associate professor at the Bourns College of Engineering, one of his graduate students and three researchers at Yahoo! in Spain, outperformed other baseline strategies by between 1.4 percent and nearly 11 percent and also did better than the Dow Jones Industrial Average during a four-month simulation.

“These findings have the potential to have a big impact on market investors,” said Hristidis, who specializes in data mining research, which focuses on discovering patterns in large data sets. “With so much data available from social media, many investors are looking to sort it out and profit from it.”

Credit: UC. Riverside
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A study on the impact of Twitter on the stock market

"In a pilot study, Mr. O'Connor found a "statistically significant" correlation, although he tested only three brands -- Starbucks Corp., Nike Inc. and Coca-Cola Co -- over a 10-month period. The more social-media fans a brand had, the better its stock was likely to do, even accounting for general market conditions.

The finding held true even though the three companies studied had very different returns. During the test, Starbucks stock increased 29%, Nike grew 14% and Coke fell by nearly 6%."

Credit: Pace & WSJ
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"Can Social Media Predict Companies' Share Prices?"

"Facebook IPO stock price was affected by Twitter public sentiment and how the network can therefore directly influence share prices. The decrease in value just 25 minutes after the drop in sentiment demonstrates just how crucial Twitter is to judge stocks"

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"Why Investors Need to Use Social Media"

With the advent of Twitter, Facebook, Reddit, TikTok (and more),

Social Media is poised to radically change the investment decision making process