How Twitter Chatter Predicts Stock Prices
Though University of California, Riverside, researchers were not looking for a correlation between Twitter talk and stock performance, they found it. Now what will they do?
What's the Latest Development?
A team of computer scientists has found that Twitter chatter can be used to predict stock prices, even though their study was not looking to do that. Researchers at the University of California, Riverside, first defined a variable they called connected components, meaning "the number of distinct conversational threads taking place around a company in any given day." Three possible threads around Apple, for example, could be the iPad, iPhone and the Foxconn factory. The more connected components, "the higher the volume of trading for that stock in subsequent days."
What's the Big Idea?
The model also suggested that the presence of more connected components signaled a rise in stock prices, prompting researchers to developed a trading formula that took advantage of this pattern. Their formula did quite well, outperforming the Dow Jones Industrial Average over four months (a 2.2% loss for the Twitter model versus a 4.2% loss for the Dow). So why the connection? Lead researcher Vagelis Hristidis theorizes that when bad news strikes, everyone focuses on that one topic, reducing the number of connected connections. Good news, perhaps being less interesting, allows for more digressions in the conservation.
Photo credit: shutterstock.com
Here's the science of black holes, from supermassive monsters to ones the size of ping-pong balls.
- There's more than one way to make a black hole, says NASA's Michelle Thaller. They're not always formed from dead stars. For example, there are teeny tiny black holes all around us, the result of high-energy cosmic rays slamming into our atmosphere with enough force to cram matter together so densely that no light can escape.
- CERN is trying to create artificial black holes right now, but don't worry, it's not dangerous. Scientists there are attempting to smash two particles together with such intensity that it creates a black hole that would live for just a millionth of a second.
- Thaller uses a brilliant analogy involving a rubber sheet, a marble, and an elephant to explain why different black holes have varying densities. Watch and learn!
- Bonus fact: If the Earth became a black hole, it would be crushed to the size of a ping-pong ball.
Protected animals are feared to be headed for the black market.
In a breakthrough for nuclear fusion research, scientists at China's Experimental Advanced Superconducting Tokamak (EAST) reactor have produced temperatures necessary for nuclear fusion on Earth.
- The EAST reactor was able to heat hydrogen to temperatures exceeding 100 million degrees Celsius.
- Nuclear fusion could someday provide the planet with a virtually limitless supply of clean energy.
- Still, scientists have many other obstacles to pass before fusion technology becomes a viable energy source.
SMARTER FASTER trademarks owned by The Big Think, Inc. All rights reserved.