Skip to Content

This week’s fleeting stock market crash prompted by a false report from the Associated Press’s hacked Twitter account has focused attention again on the growing Wall Street practice of mining news and social data to make trades.

A study in Nature Scientific Reports today illustrates just how lucrative the right combination of algorithms could potentially be.

Using Google Trends, researchers analyzed the Google search query volumes from 2004 to 2011 for a set of 98 mostly finance-related search terms, looked at how stock prices changed over that same time, and tried to see if they could retroactively tease out search patterns that showed “early warning signs” of market moves. They also tested trading strategies that would act on these signs.

The volume of the search term “debt” turned out to be the word that showed the most promise, and one trading plan based on changes in searches for this term would have yielded a return of 326 percent over the period analyzed, the authors found. For comparison, a “buy and hold” investment in the Dow Jones Industrial Average yielded 16 percent return.

Of course, it’s easier to look at historic data and make hypothetical returns than to predict how well Google Trends-based trading will work over the next decade. However, as this study shows, it’s clear that the stock trading strategies based on the mining of real-time, public data sets will continue to become more sophisticated than what has played out this week.

Keep Reading

Most Popular

This new data poisoning tool lets artists fight back against generative AI

The tool, called Nightshade, messes up training data in ways that could cause serious damage to image-generating AI models. 

Rogue superintelligence and merging with machines: Inside the mind of OpenAI’s chief scientist

An exclusive conversation with Ilya Sutskever on his fears for the future of AI and why they’ve made him change the focus of his life’s work.

The Biggest Questions: What is death?

New neuroscience is challenging our understanding of the dying process—bringing opportunities for the living.

Driving companywide efficiencies with AI

Advanced AI and ML capabilities revolutionize how administrative and operations tasks are done.

Stay connected

Illustration by Rose Wong

Get the latest updates from
MIT Technology Review

Discover special offers, top stories, upcoming events, and more.

Thank you for submitting your email!

Explore more newsletters

It looks like something went wrong.

We’re having trouble saving your preferences. Try refreshing this page and updating them one more time. If you continue to get this message, reach out to us at customer-service@technologyreview.com with a list of newsletters you’d like to receive.