Social Media Sentiment and Stock Market Trends: A Sentiment-Driven Market Interpretation

Yanzhong Yao; Yike Li; Yuxuan Liu; Yu Liu

doi:10.54254/2754-1169/2024.26654

Advances in Economics, Management and Political SciencesOpen access

Social Media Sentiment and Stock Market Trends: A Sentiment-Driven Market Interpretation

Research Article

Open Access

Social Media Sentiment and Stock Market Trends: A Sentiment-Driven Market Interpretation

Yanzhong Yao ¹, Yike Li ², Yuxuan Liu ^3* Yu Liu ⁴

¹ University of California Santa Barbara

² Purdue University

³ University of California Santa Barbara

⁴ University of British Columbia

^*Corresponding author: yuxuan_liu@ucsb.edu

Published on 9 September 2025

AEMPS Vol.215

ISSN (Print): 2754-1177

ISSN (Online): 2754-1169

ISBN (Print): 978-1-80590-357-4

ISBN (Online): 978-1-80590-358-1

Download Cover

Abstract

This article primarily explores the impact of social media sentiment on stock prices. By combining sentiment analysis data with relevant financial indicators, four different Alpha strategies were developed for this investigation. These Alphas include Post Number Alpha, RSI and Sentiment Score Alpha, Sentiment-VIX Alpha, and Sentiment Score Alpha. Each method is based on social media sentiment data and incorporates different angles or indicators to test the relationship between social media sentiment and stock prices. The research results indicate that social media sentiment has constructive value as an important indicator for predicting stock market prices and trends, and thus can serve as a reference for developing effective trading strategies.

Keywords:

Social media, stock price prediction, investment strategy, sentiment analysis, market reaction

View PDF

References

[1]. Ballinari, D., Audrino, F., & Sigrist, F. (2022). When does attention matter? the effect of investor attention on stock market volatility around news releases. International Review of Financial Analysis, 82, 102185.

[2]. Chiou, W.-J. P., Knewtson, H. S., & Nofsinger, J. R. (2019b). Paying attention to social media stocks. International Review of Economics & Finance, 59, 106–119.

[3]. Guan, C., Liu, W., & Cheng, J. Y.-C. (2021, September 15). Using social media to predict the stock market crash and rebound amid the pandemic: The Digital “haves” and “have-mores” - annals of data science. SpringerLink. https: //link.springer.com/article/10.1007/s40745-021-00353-w

[4]. Cristescu, M. P., Mara, D. A., Nerișanu, R. A., Culda, L. C., & Maniu, I. (2023, November 30). Analyzing the impact of financial news sentiments on stock prices-A wavelet correlation. MDPI. https: //www.mdpi.com/2227-7390/11/23/4830

[5]. Fekrazad, A., Harun, S. M., & Sardar, N. (2022, April 9). Social media sentiment and the stock market - Journal of Economics and Finance. SpringerLink. https: //link.springer.com/article/10.1007/s12197-022-09575-x

[6]. Smith, S., & O& rsquo; Hare, A. (2022, April 28). Comparing traditional news and social media with stock price movements; which comes first, the news or the price change? - journal of big data. SpringerOpen. https: //journalofbigdata.springeropen.com/articles/10.1186/s40537-022-00591-6

[7]. Affuso, E., & Lahtinen, K. D. (2018b, May 26). Social media sentiment and market behavior - empirical economics. SpringerLink. https: //link.springer.com/article/10.1007/s00181-018-1430-y

[8]. Ranco, G., Aleksovski, D., Caldarelli, G., Grčar, M., & Mozetič, I. (n.d.-b). The effects of twitter sentiment on stock price returns. PLOS ONE. https: //journals.plos.org/plosone/article?id=10.1371%2Fjournal.pone.0138441

[9]. Fekrazad, A., Harun, S. M., & Sardar, N. (2022a, April 9). Social media sentiment and the stock market - Journal of Economics and Finance. SpringerLink. https: //link.springer.com/article/10.1007/s12197-022-09575-x

[10]. Affuso, E., & Lahtinen, K. D. (2018a, May 26). Social media sentiment and market behavior - empirical economics. SpringerLink. https: //link.springer.com/article/10.1007/s00181-018-1430-y

References

[2]. Chiou, W.-J. P., Knewtson, H. S., & Nofsinger, J. R. (2019b). Paying attention to social media stocks. International Review of Economics & Finance, 59, 106–119.

[7]. Affuso, E., & Lahtinen, K. D. (2018b, May 26). Social media sentiment and market behavior - empirical economics. SpringerLink. https: //link.springer.com/article/10.1007/s00181-018-1430-y

[10]. Affuso, E., & Lahtinen, K. D. (2018a, May 26). Social media sentiment and market behavior - empirical economics. SpringerLink. https: //link.springer.com/article/10.1007/s00181-018-1430-y

Cite this article

Yao,Y.;Li,Y.;Liu,Y.;Liu,Y. (2025). Social Media Sentiment and Stock Market Trends: A Sentiment-Driven Market Interpretation. Advances in Economics, Management and Political Sciences,215,91-106.

Data availability

The datasets used and/or analyzed during the current study will be available from the authors upon reasonable request.

About volume

Volume title: Proceedings of the 4th International Conference on Financial Technology and Business Analysis

ISBN: 978-1-80590-357-4(Print) / 978-1-80590-358-1(Online)

Editor: Lukáš Vartiak

Conference website: https://2025.icftba.org/

Conference date: 12 December 2025

Series: Advances in Economics, Management and Political Sciences

Volume number: Vol.215

ISSN: 2754-1169(Print) / 2754-1177(Online)

© 2024 by the author(s). Licensee EWA Publishing, Oxford, UK. This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY) license. Authors who publish this series agree to the following terms:

1. Authors retain copyright and grant the series right of first publication with the work simultaneously licensed under a Creative Commons Attribution License that allows others to share the work with an acknowledgment of the work's authorship and initial publication in this series.

2. Authors are able to enter into separate, additional contractual arrangements for the non-exclusive distribution of the series's published version of the work (e.g., post it to an institutional repository or publish it in a book), with an acknowledgment of its initial publication in this series.

3. Authors are permitted and encouraged to post their work online (e.g., in institutional repositories or on their website) prior to and during the submission process, as it can lead to productive exchanges, as well as earlier and greater citation of published work (See Open access policy for details).