Hedge Funds Monitoring Bloggers for Trading Help
Hedge funds are going outside traditional media sources, monitoring influential financial commentators, including bloggers who have a strong social media presence.
Alacra, a data aggregator , monitors the opinions of 25,000 analysts by combing the web for their comments.
Alacra’s sources include such prominent bloggers as:
Barry Ritholtz – Ritholtz.com
Henry Blodget – Business Insider
Felix Salmon – Reuters
Fred Wilson – AVC.com
Howard Lindzon – HowardLindzon.com
Ken Doctor – Content Bridges
Michael Parekh – Michael Parekh on IT
Paul Kedrosky – Infectious Greed
Rafat Ali – Paid Content
Roger Ehrenberg – Information Arbitrage.
Interestingly, Alacra hones in on quotes to analyze sentiment, as it believes sentiment is more accurate than the entire blogger’s article. So far, the data suggests that stock prices generally outperform when sentiment at a given company has been positive for a number of weeks.
‘The feedback has been good so far,’ says Steve Goldstein, CEO of Alacra. ‘The challenge is low frequency. There are fewer than 200 companies worldwide with enough data to make sentiment-based trading decisions.’
Alacra tries to differentiate itself from other data aggregators by monitoring only a select group of what it feels are influential sources on the web.
Alacra has its ear to the cloud, so to speak.
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