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Follow News Sentiment on TipRanks
March 18, 2017
TipRanks ranks analysts according to objective criteria such as success rate and average return. One of the newest features is “news sentiment,” which allows individual investors to factor real-time news sentiment into their stock picks.
We know that there is a clear correlation between news and stock performance. Figure 1 shows that even when split by market capitalization, good news results in above-market returns for small-, mid- and even large-cap stocks. The study tested the returns of 200 stocks with the highest buzz and sentiment score from September 1, 2016, to November 15, 2016. A stock has a high buzz if the number of articles about the stock is very high compared to the stock’s weekly average, while the sentiment score measures the ratio of bullish to bearish articles on a stock in a particular week.