Abstract:
Research Purpose : The recent change in name by Google to Alphabet sparked a worldwide interest. This research studies the extent to which stock sentiment data expressed online is influenced by the fluency of the corporates name. It is concerned with the extent to which seemingly banal factors that affect human sentiments create bias in opinions that are formed online. The research is carried out at a time in which the online environment and crowdsourcing are increasingly competing with traditional business models and platforms for primacy. The purpose of this report is to quantify the extent to which crowd sourced stock sentiment data obtained from online sources is subject to bias resulting from the effect of spurious variables that are unrelated to the underlying fundamentals of the company. The biasing variable studied in this instance is the linguistic fluency of the corporates name.
Research Methodology : The study adopted a purely quantitative approach. Analysis was done using SAS
Research Findings : The research conducted makes a key finding that shows empirically that social media stock sentiment data are more influenced by the spurious effect of fluency of corporate name than are stock sentiments generated by traditional expert communities. This finding flies in the face of an increasingly adopted thesis that postulates superior intelligence can be obtained from an aggregation of unstructured crowd-sourced data. The research conducted also makes a key finding that the model of sentiment does not predict equally well at all levels of sentiment models are better at identifying highly recommended equities than they are at identifying those that are not
