Siliguri Institute of Technology

Name – Jeet Manna

Roll – 33405021020
Department – BBA
Semester – 6th
Sub – Financial Analytics (BBA603B)
News and Sentiment Analysis on
Finance

Analyzing Financial News

• News plays a crucial role in shaping

financial markets.
• Sentiment analysis can provide
insights into market trends.
• Studying news impact can help
investors make informed decisions.
• Use of natural language processing to
analyze news articles.
How Sentiment Analysis Works
Sentiment analysis is a complex process that involves the use of artificial intelligence
and natural language processing to analyze and interpret text data. The goal is to extract
subjective information from various sources, such as social media, news articles, and
customer reviews, to determine public opinion and sentiment on specific topics, products, or
services.
There are three steps:
Gather data from different sources. This data can be in the form of text, audio, or visual
content. Ideally, get information from three independent sources that don’t copy one another.
Once the data is collected, it is preprocessed to remove noise and irrelevant information.
Use natural language processing techniques to analyze the text data and extract meaningful
information.
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Noisy data is data that has a lot of extra, meaningless information in it, making it hard
to get accurate results. If you don’t properly filter out the noise in your data, you might
think you have accurate information when you really don’t.

Importance of Sentiment Analysis

Uncovering Market Sentiment

• Sentiment analysis measures public

opinion towards stocks.
• Positive sentiment can drive market
rallies. Photo by Pexels

• Negative sentiment can lead to

bearish market trends.
• Identification of sentiment through
text mining and social media analysis.
News Impact on Stock Prices
Correlation and Predictability

• News announcement can trigger

significant stock price movements.
• Strong correlation between news
sentiment and stock performance.
• Analyzing news sentiment for short-
term trading strategies.
• Quantitative models for predicting
stock price reactions to news.

Photo by Pexels
Financial News Sentiment Data
Sources and Datasets

• Accessing financial news datasets

from various sources.
• Reuters, Bloomberg, and financial
news APIs offer valuable data.
• Combining news sentiment data with
financial indicators.
• Availability of pre-processed news
sentiment datasets.

Photo by Pexels
Machine Learning for Sentiment
Analysis

Automating Sentiment Detection

• Utilizing machine learning algorithms

to classify news sentiment.
• Feature extraction and text
preprocessing techniques.
• Training sentiment analysis models
using labeled data.
• Application of sentiment classifiers to
analyze financial news.

Photo by Pexels
News Sentiment and Market
Volatility

Implications of News on Volatility

• Effect of news sentiment on market

volatility.
• Highly positive/negative sentiment
associated with increased volatility.
• News-driven volatility clusters and
behavioral finance.
• Utilizing sentiment analysis to assess
market risk.
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Real-Time News and Algorithmic
Trading

Automating Trading Strategies

• Integration of news sentiment analysis

in algorithmic trading.
• Reacting to news releases in real-
time.
• Implementing trading rules based on
sentiment thresholds.
• Combining news sentiment with
technical indicators in trading
algorithms.
Photo by Pexels
News Sentiment and Investor
Behavior

Psychological Factors in Decision Making

• Impact of news sentiment on investor

sentiment and behavior.
• Herd behavior and sentiment-driven
market movements.
• Contrarian and momentum strategies
based on news sentiment.
• Understanding the influence of news
on investor psychology.

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Challenges and Limitations
Considerations in News Analysis
• Ambiguity and subjectivity in news
interpretation.
• Handling noise in sentiment analysis
from unreliable sources.
• Contextual understanding and
disambiguation challenges.
• •
Overcoming limitations through
advanced NLP techniques.
Future Trends and Conclusion
Evolution of News Analysis
Growing importance of news
sentiment analysis in finance.
• Integration of artificial intelligence
and big data analytics.
• Advanced sentiment analysis
techniques and real-time insights.
Photo by Pexels
• Continued research to enhance the
accuracy of news analysis.