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For some reason, we weren't surprised when Derwent Capital Markets
announced plans to launch a hedge fund in February that will trade
based on something called "Twitter sentiment," among other things. The
science behind it comes from researchers at the University of
Manchester and Indiana University, which maintains that there is a
correlation between public mood and the Dow Jones industrial average.
Apparently, a calm public seems to indicate that the Dow will go up,
while an anxious public indicates that the Dow will go down. And
according to Johan Bollen, an associate professor of informatics and
computing at IU, Twitter posts can be analyzed and used to judge the
public mood -- with a greater than 87 percent accuracy. Hit the source
link to see him state his case.
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