Social Sentiment & Stock Markets The canary in the coalmine

Research In Motion Case Study

Testing the correlation between Public Sentiment on Twitter and Stock Price

Social Media Content Analysis Dow Jones 2012-01-17 (15 minute time frame)

DataSift provides funds with new data and insights to drive trading decisions Sentiment and Semantic analysis can be used to identify real-time trends and swings in sentiment towards stocks, industries and news. Example correlation between negative spike in sentiment and price decline for DJI index-price on 17-Jan-2012

Case in Point: Research-In-Motion (Blackberry)

Mentions of RIM surge on Twitter Sentiment of Tweets mostly pessimistic Spike in negative sentiment

RIM Social Media Content (1 hour time frame)

Announcement of

Resignation

Jan 21 - RIM’s co-CEOs announce resignation

Which countries did the Tweets come from?

A Global Topic of Conversation

Canada 30%

USA 30%

UK 20%

APAC 10%

RIM Social Media Content (15 minute time frame)

Markets Open – as expected, RIM Tumbles

①  Surprising spike of positive sentiment at beginning of trading hours (14:30 UCT)

②  As expected, RIM stock price drops on market-opening

① 

② 

Stock price declines for 20 mins, but social sentiment turns-around – 5 minutes later, stock reaches support level

1. As expected Stock Declines

2. Sentiment Inflection Point Sentiment on Twitter switches to positive value around 14:45(09:45 ECT), despite price still falling.

5 min latter the stock price reaches the support level at 15.88.

3. Support Level Tested This level is tested again after 15:20 and holds, as the sentiment of social media content remain positive.

②  Sentiment Inflection

Point

③  Support Level Tested

①  Stock declines

Geographic location

Author's social influence�(Klout score)

Number of followers

Language

Timezone

Social media platform

Gender

and up to 160 other categories...

To help make sense from social data, DataSift can aggregate data by:

DataSift – a powerful platform for creating insights from social media

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RIM Social Media Content (Klout Score above 40)

Social Influencers were good canaries

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www.datasift.com/finance