Media Coverage and the Stock Market

How do the sentiment and volume of media correlate with short-term movements in specific stock markets? In today’s world, everyone is connected through fast-moving media. It is important to consider how this has impacted larger trends, such as economics and the stock market.

Our Pivot

We originally used index funds like QQQ to explore whether media coverage had an influence on market behavior. However, after conducting further research and analyzing our initial results, we decided to pivot our focus to a specific stock. Index funds represent the overall health of the economy by tracking a broad range of companies, which makes them less susceptible to short-term media influence. In contrast, individual stocks, especially high-profile ones, can be more directly impacted by media discourse. We chose Tesla as our subject because it consistently generates significant media attention and public conversation. This makes us curious to investigate whether media narratives correlate with fluctuations in Tesla’s stock price, and to what extent sentiment and coverage might drive market movement.

Purpose

Media and Market Relationships

Investigate how fluctuations in media sentiment and volume from platforms like Twitter, Reddit, and news outlets predict short-term stock market movements, using Tesla stonks.

Compare Media Impact

Compare the impact of different media platforms (e.g., Twitter, Reddit, News) on market activity and assess varying influence strengths and patterns.

Analyze Influential Figures

Analyze the influence of high-profile figures' tweets (e.g., Elon Musk, Donald Trump) on investor behavior and short-term price changes, with an academic focus on educating through interactive visualizations.

Assumptions

Media Correlates with Market Behavior

Media sentiment and volume, particularly from high-engagement sources, are assumed to correlate with short-term stock price and volatility changes, influencing investor behavior.

High-Engagement Posts Drive Market Movements

High-engagement posts (e.g., upvotes, impressions) and influential figures (e.g., Elon Musk, Trump) are assumed to have a stronger impact on market movements due to their reach and public profiles.

Machine Learning is Accurate

Machine learning tools, like sentiment analysis and sector classification, are assumed to accurately quantify media coverage and its correlation with sector-specific market activity.