Sentiment revealed in social media and its effect on the stock market

Hailiang Chen*, Prabuddha De, Yu Hu, Byoung Hyoun Hwang

*Corresponding author for this work

Research output: Chapter in Book/Report/Conference proceedingConference contribution

16 Citations (Scopus)

Abstract

This paper investigates the extent to which sentiment revealed by traditional media and social media affects the stock market. We extract sentiment by conducting a textual analysis of articles published in the Wall Street Journal and Seeking Alpha, a popular social-media platform. We find that social-media sentiment associates strongly with contemporaneous and subsequent stock returns, even after controlling for traditional-media sentiment. The media effect is stronger for articles more closely followed by market participants and for companies mostly held by retail investors. Together, these findings point to the importance of social media as an additional channel through which views become reflected in the stock price.

Original languageEnglish
Title of host publication2011 IEEE Statistical Signal Processing Workshop, SSP 2011
Pages25-28
Number of pages4
DOIs
Publication statusPublished - 2011
Externally publishedYes
Event2011 IEEE Statistical Signal Processing Workshop, SSP 2011 - Nice, France
Duration: Jun 28 2011Jun 30 2011

Publication series

NameIEEE Workshop on Statistical Signal Processing Proceedings

Conference

Conference2011 IEEE Statistical Signal Processing Workshop, SSP 2011
Country/TerritoryFrance
CityNice
Period6/28/116/30/11

ASJC Scopus Subject Areas

  • Electrical and Electronic Engineering
  • Applied Mathematics
  • Signal Processing
  • Computer Science Applications

Keywords

  • sentiment
  • Social media
  • stock market

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