Investment Research using Data Warehouse.
What is FSB ? Fund’s Sentiment Beta.
Recent advances in Behavioural finance have shown that stock
prices are affected by “Sentiment”.
When investor sentiment is high, the low-sentiment-beta
stocks (i.e the stocks with negative loading on sentiment) are undervalued and
their subsequent returns are higher. As per the white paper by Massimo Massa
& Vijay Yadav, the low-sentiment-beta stocks significantly outperform the
high-sentiment-beta stocks. This also suggest that an ideal trading strategy
for asset manager interested in maximizing performance is to invest mostly in
low-sentiment-beta stocks.
This strategy would definitely be more efficient if asset
managers were not only able to identify the degree of sentiment loading of the
stocks (i.e whether they are high- or low-sentiment-beta stocks) but also
predict the degree of market sentiment.
News about the financial market can be found on news
websites, social media, blogs, and forums. Automating the extraction of
relevant data using web scrapers provides businesses with constant updates
about the general population’s sentiment about specific products or brands, and
enables financial leaders to predict the success or failure of certain stocks
or ETFs in the market.
Additionally, some web scrapers integrate
IP proxies to extract web data about specific geographical regions.
This can be useful for businesses to analyze the financial market in a targeted
region and optimize their financial strategies accordingly.
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