Stock Market Trend Prediction Using Sentiment Analysis

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For decades people have tried to predict the stock markets. Some have used historical price trends to predict future changes, while others rely on their gut feeling to make predictions. The prices of stocks reflect the overall confidence the market has on the stocks. The level of this confidence, according to the behavioral economics, is a collective of society’s emotions towards a particular stock, which to some extent influences their decision-making. However, is there a way to know the collective mood of society towards a stock? Can this mood be extracted from newspaper articles and magazines? To address this question, I turn to the field of Natural Language Processing. With the help of various sentiment dictionaries, I ran various types of sentiment analysis over 1.7million newspaper articles published in The Guardian between 2000 and 2016. I then chart the changing sentiments over a time period against the various stock market indices to see whether or not news sentiment is predictive of economic indicators such as stock prices.



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