Bright lights, big data: What the market may tell us about a correction
— November 15, 2014
By Vasant Dhar
Proponents of "wisdom of the crowds" contend that such data may contain within it some key insights about specific variables of interest. So can we find any evidence of this wisdom in big data?
The short answer is yes, and investment professionals should seriously consider a new factor: namely, big data based sentiment, as an input into investment decision making.
Unlike most traditional indicators that are derived from government data and surveys, the growing volumes of unstructured data contain a new type of intellectual and emotional content factor that could be a powerful addition to commonly used factors such as value and momentum. Let's consider why this might be the case.
Read the full article as published in CNBC.
Vasant Dhar is Professor and Head, Information Systems Group and Co-Director, Center for Business Analytics.