S&P Dow Jones Indices is launching the S&P 500 Twitter Sentiment Index, which aims to use the Twitter API to track S&P 500 components that are trending in sentiment.
The novel use of Twitter's API scores S&P 500 Index components based on bullish and bearish Tweets. The scoring is done by aggregating Twitter $cashtags such as $WMT, $MSFT and $AMZN.
So far, the S&P 500 Twitter Sentiment Index Series will include:
Now the analysis of $cashtags can come in handy to spot trending large-cap companies; the S&P Dow Jones Indices may get more mileage and attention by focusing on small-cap firms. Those firms are more likely to become the next meme stock.
Here are key points about the mechanics of the S&P 500 Twitter Sentiment Index:
More on sentiment analysis: