In my book, Tradestream, I talk a lot about what I call "Co-lateral Research". This is information inherently non-financial in its nature that investors can use to make better investment decisions. Take Amazon Sales Ranking, for example. Amazon provides almost real-time ranking of its best selling items. While Amazon won't reveal exactly how many units of Apple's ($AAPL) iPad it's selling, investors can get a qualitative feel for how well products are moving.
SummaryUNC Professor Joey Engelberg has been studying another form of co-lateral research, Google search data. He's been studying search trends for stocks (ie $PCLN or $NFLX) as a way to measure investor attention. Prof Engelberg has found a linkage between changes in search volume and subsequent moves in stock prices. He joins us for this installment of Tradestreaming Radio. We discuss
- which particular stocks investors pay attention do during the trading day
- the demand side of news and information for stocks
- how Google search volume is correlated to stock pricing
- a trading strategy that uses search volume to beat the market