Sentiment Analysis

Sentiment analysis is the analysis to gauge the market attitude or generic emotions towards a particular security, using the news reports, blog posts, twitter messages etc. This process usually involves the usage of natural language processing tools, machine learning, or statistics. Natural language processing (NLP) in simple terms refers to the use of computers to process text in a natural language such as English. The objective here is to extract information from unstructured or semi-structured data found in these tweets, blogs, articles and classify them as a positive, negative or neutral. A relationship (or correlation) is drawn between these classifications and the market movements using statistics or machine learning. Sentiment analysis algorithm is then used to infer whether the market sentiment is bullish or bearish. Based on such analysis trading decisions are made.