I have finally published beta version of a stock news aggregator called Stock Owl. It collects Finnish economy news from different sources and uses neural network and crowdsourcing to categorise each article's sentiment.
So what it does for you:
- You can read Finnish economic news from one website. It's mobile phone optimised service.
- Artificial intelligence analyses all news sentiments
- Shows other users interest and sentiment about different news
   -> Helps to find out general sentiment about company or economy -> predict market behavior
I suggest following pipeline for measuring and predicting stock market actions with big data:
- Awareness -> Interest -> Action (do nothing, or buy or sell stocks)
   - News (new information) arise awareness and affect emotions; spread and sentiment of news analysed in Stock Owl
   - Investors gather information before decision; they discuss with others, read magazines or use internet search engines. Interest towards company can be measured from search engines search trends.
   - Actions can be measured from stock market; price, option and volume changes. Could higher awareness and interest towards company used for predicting markets?
This is a part of my Economics Master's Thesis. My Masters Thesis hypothesis based on following:
- Humans rationality is bounded; emotions, biases and heuristics (i.e. herding) affect decision making process. Google for Tversky and Kahneman.
- Markets are not always efficient and there are limits to arbitrage
- There are different types of investors: differences in rationality (sources of information and ability/speed to process information), and in criteria for entering and exiting markets
- Todays overwhelming information flow creates poverty of attention
- Keynesian Beauty Contest
Beta version means following:
- There might be bugs in the code
- Neural network needs more human classified data to be accurate classifier (now 90% accuracy based on training)
- Some features are rough or missing
- Language is English for the moment, a translation to Finnish is coming later
- The name of service is not final
You can find Stock Owl from here:
http://ec2-52-59-224-65.eu-central-1.compute.amazonaws.com/
Please share your thoughts and comments with me.
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