The Analysis of Relationship Between Emotional Factors and Stock Price

Author:

Xue Lanhao

Abstract

This study compares the relationship between the emotion factors catching from twitter and the price of five top companies in the US throughout five years from 01/01/2016 to 12/31/2020. According to the analysis, the sentiment score (from negative to positive) of comments of a company from twitter have strong and positive relationship with the stock price of companies in most of the situation. It proves the fact that social sentiment and people’s comment on one company do have great possibility to affect the stock price of a company. Besides, it is necessary to be considered as an important factor when analyzing a company or the whole stock market. The research value of this paper is that people might use emotional factors as a parameter that is helpful to predict the price of stock in the future. On the other hand, investors might better understand the stock market and trading stocks because sometimes the price might not fully reflect the real situation of the company but also reflects the emotional factors. These results shed light on guiding further exploration of finding the rule of stock market by introducing a new factor that make the analysis more comprehensive.

Publisher

Boya Century Publishing

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