Failures and breakthroughs – exposed, reflected, considered

hedge funds and twitter – glimpses of future?

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Since creation of the first hedge fund in 1949, 10.000 funds and $2 trillion past, there is a change under way.

Derwent Capital, with its initial $39 million, is Europe’s first “social media-based hedge fund” founded on findings of this paper, which asserts that Twitter can:

predict daily moves in the Dow Jones … change in emotions expressed online would be followed between two and six days later by a move in the index… predict its movements with 87.6% accuracy.

Still small compared to standard ones, the fund analyzes thousands of tweets for words “happy,” “sad,” “angry,” etc. to determine public sentiment/mood.

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Written by Hayk

September 30, 2011 at 6:50 am

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