S&P And Twitter Team On Stock Index Based On Tweet Sentiment

S&P Dow Jones Indices has teamed with Twitter TWTR on a new endeavor that will monitor tweets to score how social media denizens feel about publicly traded companies.

What Happened: The new S&P 500 Twitter Sentiment Index Series consists of two indices:

  • The S&P 500 Twitter Sentiment Index, which measures the performance of 200 S&P 500 constituents with the highest sentiment scores.
  • The S&P 500 Twitter Sentiment Select Equal Weight Index, which measures the equal-weighted performance of 50 S&P 500 constituents with the highest sentiment scores.

The indices will monitor Twitter user sentiment daily by analyzing tweets containing $cashtags for a stock symbol; In Twitter’s case, $TWTR. S&P Dow Jones Indices will absorb these tweets in real-time through Twitter’s API in order to determine an overall "z-score" measuring the level of positive sentiment surrounding each company. The indices will rebalance at the beginning of each month.

The companies noted that their scoring model is based on a training database that determines if particular words in a tweet are positive or negative. To ensure accuracy, several filters will be used to block spam tweets.

See Also: Are You A Benzinga Pro?

Why It Happened: In announcing the new series, the companies said U.S.-based finance conversations on Twitter were up by more than 26% from 2019 to 2020.

Peter Roffman, global head of innovation and strategy at S&P Dow Jones Indices, observed, “Social media is impacting the way information is being conveyed to investors and the combination of S&P DJI's 125 years of indexing experience with Twitter's large, growing social media community data set will provide a compelling barometer for investors looking to capture market sentiment.”

Photo: PhotoMix / Pixabay

Market News and Data brought to you by Benzinga APIs
Comments
Loading...
Posted In: NewsMarketsTechS&P 500S&P Dow Jones Indicessocial mediaStock Indextweets
Benzinga simplifies the market for smarter investing

Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.

Join Now: Free!