Twitter Absolute Return Fund

Twitter Absolute Return Fund

Firm Launching Hedge Fund Trading Based on Twitter

This may be a sign of the times or a sign of the apocalypse: a new Twitter-based hedge fund is launching. Derwent Capital Markets says that it can predict shifts in the Dow Jones Industrial Average 2-6 before they occur based on words used in "tweets". Derwent claims that this method has achieved an incredible 87.6% accuracy. Now, the firm is planning to use this discovery to launch the first Twitter-based hedge fund. Derwent’s Absolute Return Fund will reportedly debut in February with £25 million.
Derwent’s Absolute Return Fund will debut in February with £25 million. The firm has engaged a University of Manchester computer science professor to build the trading models. That professor, Xioa-Jun Zeng, worked on a paper published in October about using Twitter to predict movements in the Dow.

The hedge fund is in talks with the other two authors, Indiana University’s Johan Bollen and Huina Mao, about coming on board.

“Sentiment and mood dramatically change the impact of positive and negative new stories,” Derwent’s Paul Hawtin told Bloomberg News. “If the market’s in a very positive and bullish mood, it can shrug off bad news—bad news comes out and you expect the Dow to fall, and it doesn’t.” Source

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Tags: Twitter Hedge Fund, Twitter Based Hedge Fund, Twitter Absolute Return Fund, Absolute Return Fund based on Twitter

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