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Analysis of the Relevance of Sentiment Data for the Prediction of ERs in a Multi-Asset Framework

P. Desforges, C. Geissler and F. Liu. Journal of Forecasting, 15 February 2023.


Abstract: In this study, we look at the relevance of sentiment data for the prediction of excess returns in a multi-asset analysis. We start by initial exploratory data analysis in order to assess the pertinence of the sentiment data. We then compare the performance of rule-based algorithms with and without the sentiment data. The data considered is provided by Ravenpack. Finally, we explore the economic relevance of the forecast model in a long-only and long-short context. Inclusion of sentiment data leads to encouraging results.




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