Those who have followed this blog for some time know that Social Data is something that interests me greatly. As this blog continues to attract viewers, I can only assume research on social data and the financial markets is of interest to you all as well!
So I wanted to pass on a link to a blog post I contributed to showing a rather curious correlation between volatility and social media message data.
You see, it turns out that people talk about different sets of assets when volatility is high versus low in the stock market:
…this is a story of risk, and the avoidance of that risk, in realtime. During periods of “risk-off”, and depending on what side of the trade you’re on, there’s an opportunity to pile into a trade, or disassociate yourself with that exposure. On StockTwits, what we see is a conversation flow. There’s a “flight to safety”, and an avoidance of risk, which is measurable, and repeatable. This translates to not just trading volume, but a shift in asset classes as well: conversations flow from equities, into broader indexes, and different trading instruments altogether. During heightened volatility, conversations around ETFs and Index BOOMS…
full article here:
Full disclosure: if you take nothing from this article just make sure you look at this chart.