An Overview on Sentiment Mining for Stock Market prediction

Abstract

A growing body of research and practical applications employ social media data as a proxy for the complex behavior of investors in financial markets. This paper provides an overview of academic research related to the link between social media and financial markets in order to give insight into future works and challenges on investor sentiment analysis. The theoretical rationale of this relationship is predominantly defined by behavioral finance. Behavioral finance shows that emotions have a considerable impact on individual behavior. Researchers of this discipline contradict the standard model of efficient markets and considers irrational factors like investors sentiment and public mood as influential for asset pricing and financial market volatility. In this context, social media is a novel tool enabling the collection of data about such behavioral factors.