Newsletters
News & Information for Technology Purchasers NewsFactor Sites:       NewsFactor.com     Enterprise Security Today     CRM Daily     Business Report     Sci-Tech Today  
   
This ad will display for the next 20 seconds. Click for more information, or
Home Enterprise I.T. Cloud Computing Applications Hardware More Topics...
Build Apps 5x Faster
For Half the Cost
Enterprise Cloud Computing

On Force.com
World Wide Web
Next Generation Data Center Is Here!
Average Rating:
Rate this article:  
Big Data from Google Trends Used To Predict Dow Swings
Big Data from Google Trends Used To Predict Dow Swings

By Barry Levine
April 27, 2013 9:41AM

    Bookmark and Share
The researchers employed an investing game to test the concept. If in Google Trends financial searches went down, thus apparently indicating less interest in the market and lower prices, they "bought" stocks to hold them for the long term. If in Google Trends searches rose, possibly indicating an increase in market interest, they shorted the market.
 



Can aggregated data from Google predict the stock market? Research from three economists says yes to Big Data. The three researchers have published a paper indicating that data from Google Trends can predict up and down price moves on the Dow Jones Industrial Average.

The researchers had previously discovered that the number of searches on a company's name, and the number of times that company's stock was traded were related, but it couldn't determine pricing -- meaning it couldn't help investors.

Frequency of Search Terms

So the team took a broader view of the stock market. They tracked 98 finance-related search words or phrases, such as "debt" or "derivatives," using data from 2004 to 2011. The frequency of those searches was compared with the DJIA's closing price, which is based on 30 stocks.

The researchers employed an investing game, using imaginary money, to test the concept. If financial searches went down, thus apparently indicating less interest in the market and lower prices, they "bought" stocks to hold them for the long term. If searches rose, possibly indicating an increase in market interest, they shorted the market. In short sales, borrowed stocks are sold and bought back later at what is hoped will be a lower price because the market has gone down.

Shorting assumes the market will fall, and the researchers' speculated that Google searches increased because stock owners were getting nervous about the market, and getting ready to sell their stock. In fact, that seemed to be the case -- an increase in searching about financial terms preceded a fall in prices.

'Debt' Is the Key

The key term: "debt." When searches for that term dropped, they went long; when "debt" searches increased, they shorted. Using this strategy, they increased the value of their imaginary holdings by 326 percent, compared with a 16 percent return for just buying-and-holding stocks.

The economists are Tobias Preis of Warwick Business School in the U.K., Helen Susannah Moat of University College London, and H. Eugene Stanley of Boston University. Their research is being reported in the journal Scientific Reports.

What if everyone is reading this and other articles on their research? The correlation could evaporate, or perhaps some market conditions respond more exactly to other search terms. But expect more of this kind of finding-the-real-meaning in Big Data for investing, as researchers did deeper into other Google Trends patterns, or large numbers of Wikipedia searches, or social media chatter.

Searching trends in Google's search engine are also being examined for other possible correlations.

When 6 million Net-surfing volunteers agreed to have their searching patterns tracked, for instance, an increase in searches for hyperglycemia (high blood sugar) by those who took both the antidepressant Paxil and the statin Pravachol led medical researchers to the discovery there was such a side effect. In separate research, flu-related searches, in conjunction with data from the Center for Disease Control and other sources, are similarly being investigated for their ability to predict flu outbreaks.
 

Tell Us What You Think
Comment:

Name:





 World Wide Web
1.   Zillow Buys Trulia for $3.5 Billion
2.   Competition Spurs Ultra-Fast Internet
3.   Google Buys Streaming Site Twitch
4.   'Right To Be Forgotten': 26 Questions
5.   Internet of Things Comes to DIYers


advertisement
Radical.FM's Freemium Biz Model
Online radio startup asks for donations.
Average Rating:
Facebook Social Experiment Irks Us
Secretive test was legal, but ethical?
Average Rating:
Competition Spurs Ultra-Fast Internet
Gigabit broadband push is underway.
Average Rating:
Product Information and Resources for Technology You Can Use To Boost Your Business

Network Security Spotlight
Researchers Working To Fix Tor Security Exploit
Developers for the Tor privacy browser are scrambling to fix a bug revealed Monday that researchers say could allow hackers, or government surveillance agencies, to track users online.
 
Wall Street Journal Hacked Again
Hacked again. That’s the story at the Wall Street Journal this week as the newspaper reports that the computer systems housing some of its news graphics were breached. Customers not affected -- yet.
 
Dropbox for Business Beefs Up Security
Dropbox is upping its game for business users. The cloud-based storage and sharing company has rolled out new security, search and other features to boost its appeal for businesses.
 

Enterprise Hardware Spotlight
Watson Gets His First Customer Service Gig
Since appearing on Jeopardy, IBM's Watson supercomputer has been making a living using his super-intelligent knowledge base for business verticals. Now, Watson's been hired for his first customer service job.
 
Tablet Giants Apple and Samsung Feel the Heat
When a company saturates its home market with a once-hot product, expect it to pump up efforts elsewhere. Apple, for its part, is now pushing iPads to big corporations and the enterprise market.
 
Microsoft Makes Design Central to Its Future
Over the last four years, Microsoft has doubled the number of designers it employs, putting a priority on fashioning devices that work around people's lives -- and that are attractive and cool.
 

Mobile Technology Spotlight
BlackBerry Buys German Security Firm
Looking to burnish its business reputation, BlackBerry has agreed to buy a German mobile security company that specializes in voice/data encryption as well as anti-eavesdropping solutions.
 
T-Mobile Calls 'BS' on AT&T's New Promotion
While Verizon Wireless is moving to throttle bandwidth hogs, a scrappy T-Mobile is taking on the giants with a limited-time promotion it hopes will drive up the churn rates of its wireless rivals.
 
Microsoft Update to Windows Phone 8.1 Already Coming
An update to Windows Phone 8.1 is on the way just weeks after the release of the product itself. Microsoft has begun detailing some of the update features to phone manufacturers.
 

Navigation
NewsFactor Network
Home/Top News | Enterprise I.T. | Cloud Computing | Applications | Hardware | Mobile Tech | Big Data | Communications
World Wide Web | Network Security | Data Storage | CRM Systems | Microsoft/Windows | Apple/Mac | Linux/Open Source | Personal Tech
Press Releases
NewsFactor Network Enterprise I.T. Sites
NewsFactor Technology News | Enterprise Security Today | CRM Daily

NewsFactor Business and Innovation Sites
Sci-Tech Today | NewsFactor Business Report

NewsFactor Services
FreeNewsFeed | Free Newsletters

About NewsFactor Network | How To Contact Us | Article Reprints | Careers @ NewsFactor | Services for PR Pros | Top Tech Wire | How To Advertise

Privacy Policy | Terms of Service
© Copyright 2000-2014 NewsFactor Network. All rights reserved. Article rating technology by Blogowogo. Member of Accuserve Ad Network.