Wired Science article give Twitter stock market analyzer and forecaster actually works
Here are some quotes:
We were pretty astonished that this actually worked,” said computational social scientist Johan Bollen of Indiana University-Bloomington. The new results appear in a paper on the arXiv.org preprint server.
The original questionnaire asks people to rate how closely their feelings match 72 different adjectives, including “friendly,” “peeved,” “active,” “on edge” and “panicky,” and uses the responses to measure mood along six dimensions: calmness, alertness, sureness, vitality, kindness and happiness.
“We’re using Twitter like a psychiatric patient,” Bollen said. “This allows us to measure the mood of the public over these six different mood states.”
“I sank into my chair. That’s a pretty big result,” Bollen said. “It was one of those ‘Eureka!’ moments.”
“Including this mood information leads to higher accuracy,” Bollen said
“This was probably one of the most difficult periods to predict,” he said. “We had a presidential election, we had what looked to be financial Armageddon, we had the start of what has been the deepest and greatest recession since the 1930s… If our algorithm was able to predict Dow Jones Industrial Average in that period, we figured that may establish some kind of lower baseline. It could do a lot better in other periods of time.”
“It’s a pretty interesting result,” commented computer scientist Sitaram Asur of HP Lab
“If it is true, if we can actually find this correlation to be consistent, that will be a very important result,” he said. “But right now, I would be cautious about saying how important this is.”
Bollen agrees that the result has some shortcomings. “We need to expand this,” he said. The next step, he said, is to “put some of our money where our mouths are, and try to do this in real time.”