Is there any possible way that Twitter can predict the stock market before it even happens? This is one of the main questions that pop up on a regular basis, Twitter is more about tweeting messages for acknowledgement and promotion, not predictions – surely.
There was a paper written way back in 2010 titled “Twitter Mood Predicts Stock Market,” some say this is just crazy and cannot be done, when this paper was released it gained a lot of attention with some saying it cannot be done.
Can the Twitter mood really predict the stock market? It is believed to not be true because of the ‘conventional economic theory’ also known as the ‘Efficient Market Theory. In other words and in simple terms stock prices in the market are random and show different patterns, but surely these random patterns can be deciphered into hard evidence to show stock predictions before they happen.
The stock market goes up and down regularly, it never sits still on any particular day, so how can Twitter predict any such pattern? The written report by Xiao-Jun Zeng, Johan Bollen and Huina Mao back in 2010 say that there is a “degree of “calmness” of the Twitterverse can predict — with 87.6 percent accuracy,” we know we are bringing this up 4 years after it has been written but we want your comments on the matter.
How can Twitter predict the ‘Dow Jones Industrial Average’ movement around six days before it has even occurred? Apparently by using what is called ‘OpinionFinder’ and Twitter ‘mood tracking tools’ it can determine Google-Profile of Mood States, six dimensions of mood, which includes calm, kind, alert, vital, sure and happy, it also measures positive versus negative mood.
Do you agree with the ‘Twitter mood predicts stock market’, do you have your own answers?