Google Search Volumes “Can Predict Stock Market Movements”

A recent academic study suggests that there is a link between Google search volumes for certain terms and movements in stock market.

The study by academics from London, Warwick and Boston (which you can read in full here, should you wish to go into far more detail than we can cover here), used the data available from Google Trends, which shows the volume of searches made for keywords over time.

They analysed the volumes of 98 different search terms relating to the stock market, and looked at how the Dow Jones index fared as the volumes of these searches changed. In the case of one term, “debt”, they suggest that a trading strategy based on this keyword could have yielded a return of 326%.

Google Trends Trading Strategy

Via Finextra


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