Sentimental Analysis – A New Realm of Insights into the Market
With markets getting ever trickier and harder to predict, how do you make the right investment decisions? Our team at Unicorn Bay has developed a state of the art sentiment analysis mechanism that gives you the leanest sentimental insights into the market. It just a few clicks away! Learn what the crowd is thinking about the market or a particular stock.
What is Sentimental Analysis?
The sentimental analysis is a method to analyze and predict stocks behavior based on opinion mining. Unlike technical analysis that is based on hard numbers and formulas, and unlike fundamental analysis that looks for the underlying forces affecting the market, the sentimental analysis is based on the notion that stock prices and public opinions regarding that stock are not only tied together but can change each other in both directions. Sentimental analysis mines and processes information from public sources such as social media (e.g., Twitter) and news. Just like fundamental and technical analysis, sentimental analysis can give accurate predictions about stock movements.
Fundamental, Technical or Sentimental Analysis?
Neither type of analysis should be used alone in making investment decisions. Sentimental analysis can be considered an essential supplement to fundamental and technical analysis. These three prove extremely handy when used together, offering compelling insights into the market. They mostly overlap to provide a complete view of the stock’s current potential and can be used together to predict where the stock is heading.
Unicorn Bay and Sentimental Analysis
Our researchers designed an analytic engine using a set of newly developed Bayesian filters to perform opinion mining and analysis. Our engine monitors public channels in the news and social media 24 hours a day, seven days a week to collect, curate and organize data, discovering the latest sentiments about your favorite stocks.
Our scanner gathers data on many favorite stocks such as $AAPL (Apple), $FB (Facebook), $AMZN (Amazon) and many others. Mentions of stock symbols are not very common in social media, but considering the sheer volume of communications, stocks do get their share of discussions. The mined data is then run through a semantic engine performing the actual emotional analysis. The engine attempts to identify six basic emotions, namely: anger, sadness, joy, fear, disgust, and surprise. Besides, the engine performs a polarity analysis, determining the skew of the aggregate data towards a positive, negative or neutral emotional tone for that stock.
The aggregate data is filed and published to our users in a format that is easy to understand.
For example, we have an aggregate sentimental analysis chart for the first few weeks of May for Amazon ($AMZN) :
Does Sentimental Analysis Work?
It works like a charm. Just compare the sentimental chart above with the actual graph of Amazon’s stock below:
- The slump towards negative emotions on 5/15/15 is met with a similar drop in stock price on the same day.
- Notice the volume jump on that day and compare it to the sudden massive drop on the sentimental chart. Sentimental analysis correctly predicted both the price and the volume. In this case, a sentimental analysis was the accurate combined indicator of price and volume.
While not invincible, sentimental analysis has proven to be a useful (and usable) tool for predicting stock movements. The November 2013 $4.7 Blackberry buyout failure was first surfaced to the public through media, but before anybody even heard the news, Twitter feed sentiments predicted a drop in Blackberry’s stock.
According to social analytics company, Dataminr aggregated Twitter feeds can indeed demonstrate a high correlation with stock market returns.
Emotional analysis has real potential. Its use is growing in the trading arena.
What other features does Unicorn Bay provide with Sentimental Analysis?
At Unicorn Bay, we care about the quality and flexibility. In addition to a graphical representation of sentimental analysis, our customers have access to pie charts that can be used to compare public sentiments on different stocks.
Here, two pie charts are shown that compare public emotions for Apple and Amazon on Twitter during the period of May 6 through May 17.
Note the significant areas for ‘Anger’ & ‘Fear’ in Amazon’s chart as compared to Apple.
In addition to this, Unicorn Bay also provides some other screeners based on a sentimental analysis. These include unusual tweets volume, significant positive skew, most positive, and many more.
Read more about our analysis methodology here.
Please contact us if you are interested in getting more detailed data or want access to our API. You can provide us feedback or contact us regarding sentimental analysis at email@example.com or via the contact form: