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Can natural language processing accurately predict stock market movements based on Reddit World News headlines?
- 1 New York University
- 2 University of California Santa Barbara
- 3 University of San Francisco
* Author to whom correspondence should be addressed.
Abstract
This research examines the application of machine learning and natural language processing (NLP) methods to stock market movement forecasting. Many NLP approaches were used to gather and preprocess Dow Jones Industrial Average (DJIA) data and Reddit Global News headlines. The preprocessed data were then used to train three machine learning algorithms (Random Forest, Logistic Regression, and Naive Bayes) to forecast the daily trend of the DJIA. According to the study, the Naive Bayes algorithm, along with Textblob, fared better than the other two models, obtaining an accuracy of 68.59%, which is an improvement above previous research. These findings show how NLP and machine learning may be used to forecast stock market patterns and offer ideas for further study to boost the precision of these models.
Keywords
natural language processing, text opinion mining, stock market, DJIA, sentiment analysis, Reddit news, machine learning
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Cite this article
Cao,C.;Yu,X.;Qian,C. (2023). Can natural language processing accurately predict stock market movements based on Reddit World News headlines?. Applied and Computational Engineering,29,84-91.
Data availability
The datasets used and/or analyzed during the current study will be available from the authors upon reasonable request.
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Volume title: Proceedings of the 5th International Conference on Computing and Data Science
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