London, Oct 21 (IANS) The reigning mood among Twitter users can predict the rise and fall of the stock market nearly a week in advance.
Johan Bollen, associate professor of informatics at the Indiana University, US, has discovered that the correlation between the Dow Jones and the collective public mood was almost 90 percent accurate.
Bollen and his researchers noticed the correlation after they analysed more than 9.8 million tweets from 2.7 million users during 10 months in 2008.
The team picked tweets which described how the user was feeling and then these descriptions were divided into six categories of emotion: calm, alert, sure, vital, kind, and happy, reports the Daily Mail.
An online mood-tracking tool called OpinionFinder also measured whether the users were generally positive or negative and how that changed over time, according to an Indiana University release.
The team was then able to measure variations in public mood and then compare them to closing stock market values.
The researchers then correlated the two sets of values – Dow Jones and public mood -and used it to test a hypothesis that predicting stock market closing values could be improved by including public mood measurements.
‘What we found was an accuracy of 87.6 percent in predicting the daily up and down changes in the closing values of the Dow Jones Industrial Average,’ said Bollen.