23 April 2017
Find out more

Twitter analysis boosts trading results

06 April 2011  |  10810 views  |  0 twitter logo

Twitter is being used by German economists for a Web site that predicts stock price trends, after an academic study found the micro-blogging site a prescient tool.

In a study, the Technical University of Munich economists analysed 250,000 Twitter messages written in a six-month period related to S&P 500 listed companies.

They found the sentiment of tweets to be associated with abnormal stock returns and message volume to predict next-day trading volume.

The analysis shows that if an investor had used Twitter sentiment to guide share purchases in the first half of 2010, they would have achieved an average rate of return of up to 15%.

Timm Sprenger, economist, TUM, says: "If a Twitter user often gives good stock recommendations, he will, as a rule, have more followers and will be 'retweeted' (ie quoted) more often by other users. Hereby, tweets with good recommendations are affirmed and receive greater weight in the overall analysis."

Sprenger has now set up a Web site to exploit the findings. Currently operating in Beta, TweetTrader.net acts as as a real-time iinformation aggregator for stock-related social media content.

London-based Derwent Capital Markets has already launched a £25 million hedge fund using Twitter to predict the market after separate research published in October found that analysing the content of daily Twitter feeds using two mood tracking tools enabled the team to predict with an 87.6% accuracy the daily ups and downs in the closing value of the Dow Jones Industrial Average.

You can see the beta TweetTrader site here.

Comments: (0)

Comment on this story (membership required)

Finextra news in your inbox

For Finextra's free daily newsletter, breaking news flashes and weekly jobs board: sign up now

Related stories

Aussie traders turning to social media - survey

Aussie traders turning to social media - survey

23 March 2011  |  8170 views  |  2 comments
SunGard introduces social media surveillance tech

SunGard introduces social media surveillance tech

07 February 2011  |  14012 views  |  3 comments
Hedge fund taps Twitter to beat market

Hedge fund taps Twitter to beat market

17 December 2010  |  9375 views  |  1 comments
Nasdaq serves up Twitter stock buzz on iPhone

Nasdaq serves up Twitter stock buzz on iPhone

26 October 2009  |  6883 views  |  0 comments

Related blogs

Create a blog about this story (membership required)
visit dh.comVisit capgemini.com

Top topics

Most viewed Most shared
BBVA runs live funds transfers over RippleBBVA runs live funds transfers over Ripple
8776 views comments | 27 tweets | 16 linkedin
Western Union and MoneyGram unveil Facebook Messenger bots; Mastercard and Amex pile inWestern Union and MoneyGram unveil Faceboo...
8135 views comments | 16 tweets | 17 linkedin
hands typing furiouslyDoes the Buck Stop with GameStop?
7650 views 0 | 3 tweets | 7 linkedin
Alipay and WeChat near $3 trillion payments milestoneAlipay and WeChat near $3 trillion payment...
7615 views comments | 35 tweets | 36 linkedin
Bank of England accelerator to tackle Big Data and privacy in distributed ledgersBank of England accelerator to tackle Big...
6700 views comments | 19 tweets | 11 linkedin

Featured job

to 120K base, £300K ote, stock options
London, UK

Find your next job