Friday, October 29, 2010

Twitter (mood) as a predictor of the Dow

Image representing Twitter as depicted in Crun...            Image via | Indiana Daily Student |:
"..research by Johan Bollen, an associate professor in the School of Informatics and Computing at IU, supports speculation that these components could be related.
Bollen conducted an empirical study of more than 10 million Twitter posts — tweets — during 10 months in 2008.
His findings revealed a startling correlation between aggregate mood expressed on Twitter and the Dow Jones Industrial Average.
The predictions are nearly 90 percent accurate up to a week in advance of the Dow’s close.
Here is a video interview with the author from Bloomberg (can not embed).
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1 comment:

Richard said...

I think this is either a classic case of confusing correlation with causation, or just data mining. I posted a critique of their paper on my blog here.