London, Oct 21 (ANI): A study has found that the general mood among Twitter users can actually predict the rise and fall of the stock market almost a week in advance.
Researchers at Indiana University noticed the correlation between the Dow Jones and the collective public mood after they analysed more than 9.8 million tweets from 2.7 million users during 10 months in 2008.
The team picked tweets, which described how the user was feeling and then these descriptions, were divided into six categories of emotion: calm, alert, sure, vital, kind, and happy.
An online mood-tracking tool called OpinionFinder also measured whether the users were generally positive or negative and how that changed over time.
The team was then able to measure variations in public mood and then compare them to closing stock market values.
The researchers then correlated the two sets of values, Dow Jones and public mood, and used it to test a hypothesis that predicting stock market closing values could be improved by including public mood measurements.
"What we found was an accuracy of 87.6 percent in predicting the daily up and down changes in the closing values of the Dow Jones Industrial Average," the Daily Mail quoted IU Associate Professor of Informatics Johan Bollen as saying.
According to Wired, they discovered that one particular emotion, calmness, correlated with how the Dow Jones reacted.
"In fact, the calmness index appears to be a good predictor of whether the Dow Jones Industrial Average goes up or down between two and six days later," Bollen stated.
Bollen posted the National Science Foundation-funded research paper to the open access science archive arXiv. (ANI)
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