Heckyl Alpha Pulse

Adapting to “Social” to make Intelligent Investment Decisions

Posted on January 30, 2015 Updated on February 12, 2015

The global business environment has been changing rapidly as we are ushered into a new era of the digital age. The rapid emergence of social media, continued penetration of smartphones and tablets, coupled with technology enablers like Analytics and Cloud, are expected to play an important role in how organizations interact with their customers and understand consumer behaviour. Simply put, SMAC is a collaborative term for Social, Mobile, Analytics and Cloud. In our view, these four technologies would be driving innovation in the global business ecosystem, in the coming decade.

In this blog, we would like to focus on the Social aspect of SMAC. Given the lack of suitable case studies, many organizations in the Banking, Financial Services and Insurance (BFSI) sector have remained uncertain around the use of Social. Within the ambit of brokerages, Social has been relatively limited to discussion forums and chatrooms etc.

In today’s world, Social is faster than any other form of media. Given continued creation and consumption of social media content by users (e.g. Twitter: 500m tweets sent per day, 284m monthly active users¹), we feel that investors can extract significant benefits through effective social media usage.

In this information age, where every piece of information about a stock, sector, economy – or even geo-politics – is critical, Social can be immensely helpful to investors in getting timely access to critical information. The “FIND (Financial In News and Data)” engine of Heckyl captures real-time news across social media (in addition to the mainstream media) for companies, businesses, markets and economies. For twitter users and blogs, Heckyl has done 5 years of back testing to rate sources (bloggers, tweeters) based on their accuracy with respect to particular sectors and even individual companies. In addition it also tracks the number of followers, retweets and several other parameters to calculate the authenticity of the message.

Our revolutionary NLP (Natural Language Processing) algorithm segregates and highlights market-moving tweets and social media content as “breaking alerts”. This timely presence of information helps individual retail traders as well as institutional investors, in making smart investment decisions.

Case Study of Electrolux

We highlight a case study of Electrolux AB, a multinational appliance manufacture, to flag how social media can be utilized by traders and investors to make timely and intelligent investment decisions.

On 7^th July 2014, Insider Louisville (a trusted source as per our algorithm) tweeted that “Monday Business Briefing: More sources say GE talks with Electrolux are real”². This was a positive news for the Electrolux stock and our unique algorithm highlighted this tweet as a “breaking alert” accordingly.

This news got covered in the mainstream media (Live Squawk³) on 13^th August implying a significant time lag. From 7^th July to 13^th August, Electrolux stock was mostly flat (+0.4%). From 13^th August to 17^th September, Electrolux stock shot up +21%. That’s a whopping 21% gain in just about 35 days! (At the time of writing this blog, the Electrolux stock is up +53% from 13^th August 2014.)

A trader or investor can make intelligent investment decisions using our News product (which captures news from both social media and mainstream media) in real time. To learn how the Heckyl Platform can help in making more profitable trades in the future, talk to us! To know more, mail us at info@heckyl.com.

1. https://about.twitter.com/company, accessed on 28 Jan 2015

2. https://twitter.com/insiderlou/status/486092807040299010

3. https://twitter.com/livesquawk/status/499700922826907648