Uncovering The Relationship Between Economic News and Daily Market Fluctuations: An Empirical Study
DOI:
https://doi.org/10.58445/rars.2324Keywords:
Economic News, Market FluctuationsAbstract
Our paper sought to quantify S&P 500 performance based on economic news sentiment data. If successful in finding a substantial correlation, we hoped to predict price changes based on the tone of economic news on any given day. Previous research has shown conflicting information regarding the correlation between economic news sentiment and stock price. Our results centered around two primary sources used to analyze economic news and assist us in understanding how positive, negative, or neutral economic news was on a given day. A single variate regression showed that our two primary datasets have a coefficient of correlation of approximately -0.0267953. This result suggests that economic news sentiment has little to no impact on the daily stock price of the S&P 500; however, negative news has a slightly more consistent impact on stock price than positive news.
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