Dow Jones And Twitter Examine The Relationship Between Popularity On Social Media And Stock Price Movements

JAKARTA – Two new stock indexes created by the S&P Dow Jones Index and Twitter will unravel the mystery about the influence of popularity on Thursday, November 18. They measure the performance of the most crowded companies for investors by paying attention to the influence of social media.

Twitter has long played a central role for investors and traders to share stock tips, keep up with the latest company news and keep up with the latest musings from CEOs like Tesla, Elon Musk, who recently surveyed his 64 million shares to followers on whether he should sell 10% of his shares.

The S&P 500 Twitter Sentiment Index will measure the performance of the top 200 companies in the S&P 500 that have the "highest sentiment scores", based on how social network users discuss stocks, the S&P Dow Jones Index said.

The companies in the index will be weighted by market capitalization. The second index will measure the performance of the top 50 companies with the same weight.

The new index comes as tweets about finance increase on the San Francisco-based social media site, especially with the growth of cryptocurrencies. Finance-related conversations rose more than 26% in 2020 from a year earlier, Twitter said.

S&P DJI said it will measure Twitter sentiment from S&P 500 companies daily by analyzing tweets containing "cashtags", a stock ticker feature that works similarly to hashtags, and assessing whether the tweets were more positive or negative. The two indexes will be rebalanced every month.

Amazon.com Inc, JPMorgan Chase & Co, and Meta Platforms Inc, the new name for Facebook, will be among the companies on the Twitter Sentiment Index, DJI's S&P said, although it declined to provide a full list.