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

Workers disinfect the street outside Shijiazhuang Railway Station
Workers disinfect the street outside Shijiazhuang Railway Station

Why China is still obsessed with disinfecting everything

Most public health bodies dealing with covid have long since moved on from the idea of surface transmission. China’s didn’t—and that helps it control the narrative about the disease’s origins and danger.

individual aging affects covid outcomes concept
individual aging affects covid outcomes concept

Anti-aging drugs are being tested as a way to treat covid

Drugs that rejuvenate our immune systems and make us biologically younger could help protect us from the disease’s worst effects.

Europe's AI Act concept
Europe's AI Act concept

A quick guide to the most important AI law you’ve never heard of

The European Union is planning new legislation aimed at curbing the worst harms associated with artificial intelligence.

Stay connected

Illustration by Rose WongIllustration 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.