An Analysis of the Correlation between Stock Price Fluctuations and Social Media Traction
DOI:
https://doi.org/10.47611/jsrhs.v12i4.5685Keywords:
finance, investing, reddit, social media, data, nvidia, pfizer, jp morgan chase, exxonmobil, ford, walmart, spy, stock market, trends, correlationAbstract
This paper aims to identify the correlation between stock performance and social media traction during 2020. It analyzes data from three different investment-focused communities within the social media platform Reddit. This data is compared to the historical financial data of six stocks across six different industries in the year 2020. The number of posts with the name of the stock within the original post each week is compared to the absolute percent change between market open to close for that week. As a control, data from the same time frame on the SPDR S&P 500 ETF Trust is used for comparison with the experimental data. All of the stock price information was taken from Yahoo! Finance. This study reveals that there is a statistically significant positive correlation between stock price change and number of Reddit posts each week. The observed correlation between stock performance and social media patterns has a significant impact in determining future stock volatility and predicting short-term investor sentiment.
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