Predictive modeling of stock indices closing from web search trends

TL;DR

This paper investigates how web search trends relate to stock market indices worldwide, revealing stronger correlations in developing and Western economies, and emphasizes developing decision support systems using big data for market forecasting.

Contribution

It provides empirical evidence of the causal relationship between search interest and stock prices across different economies, highlighting the need for advanced decision support systems.

Findings

Global search interest correlates more with developing economies.

Western countries show a stronger influence of search trends on stock indices.

South Asian markets are less affected by search interest data.

Abstract

The study aims to explore the strength of causal relationship between stock price search interest and real stock market outcomes on worldwide equity market indices. Such a phenomenon could also be mediated by investor behavior and extent of news coverage. The stock-specific internet search trends data and corresponding index close values from different countries stock exchanges are collected and analyzed. Empirical findings show global stock price search interests correlates more with developing economies with fewer effects in south asian stock exchanges apart from strong influence in western countries. Finally this study calls for development in expert decision support systems with the synthesis of using big data sources on forecasting market outcomes