The popularity of big brands on Facebook, Twitter and YouTube may predict stock prices ten and thirty days later, according to a study at Pace University in New York City.
The research analyzed data over ten months—from April, 2010 to February 2011—for Starbucks, Coca Cola and Nike, comparing their daily stock price movements against data provided by Famecount.com, a social media analytics firm. “We were able to reliably predict daily stock prices over a 10 month period – during which the stocks of the companies experienced radically different returns, with Starbucks climbing 29%, Nike appreciating by 14%, and yet Coke declining by nearly 6% – even when the social media data was lagged by as much as 30 days, said study author Arthur J. O’Connor, an IT management consultant working in the financial services industry enrolled in the executive doctoral program in business at Pace.
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