Summary of News versus Sentiment
Predicting Stock Returns from News Stories
Federal Reserve Board, 2016
Artificial intelligence and algorithms may inform the future of stock picking.
Algorithms have been buying and selling stocks for some time now, and in the past few years, as many media outlets look for cost savings, algorithms have also begun writing news stories. So the time may be right for artificial intelligence to take over the management of investments, sending the multitrillion-dollar investment industry into a paradigm shift. An intriguing new paper from economists Steven L. Heston and Nitish R. Sinha demonstrates that artificial intelligence and algorithms can successfully make share price predictions using news stories. getAbstract recommends this thought-provoking but highly technical description of novel research on news sentiment analysis and stock prices.
In this summary, you will learn
- How news can predict future stock price movements
- Why no news is not necessarily good news
- Whether positive and negative news are equally effective at moving prices
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