Can Facebook Popularity Predict Stock Prices?

A brand's popularity on Facebook just might predict how the company's stock moves.

A brand’s popularity on Facebook just might predict how the company’s stock moves.

A so-called pilot study by a doctoral student has found a correlation between a brand’s fan count and stock performance.

The research uses Famecount‘s measurements of Starbucks, Coca-Cola and Nike on social media and compares them to stock prices.

The study’s author, Arthur O’Connor, a PhD candidate at Pace University, said:

By using social network popularity data on three major consumer brands, we were able to reliably predict their respective daily stock prices over a 10 month period – during which the stocks of the companies experienced radically different returns, with Starbucks climbing 29 percent, Nike appreciating by 14 percent, and yet Coke declining by nearly 6 percent – even when the social media data was lagged by as much as 30 days.

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