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Newfound Correlation Between Google and Stock Trading

November 22, 2010

A joint study on search engine data analyzed by BU Physics Professor H. Eugene Stanley, along with Tobias Preis and Daniel Reith from Johannes Gutenbers University Mainz in Germany, found a correlation between Google searches and financial market fluctuations.

Stanley and his colleagues collected query data from 2004 to the present. They compared the data from Google Trends, which reflects keywords that people search for daily, with the S&P 500 weekly index of stocks. While there was no relationship between the number of Google searches and the pricing of shares of stock, the group did found that search volume data correlates with stock transactions. A company stock will be traded at a high volume if there is an increase in searches of the particular company on Google.

Stanley’s study is published in the latest issue of Philosophical Transactions of the Royal Society A. Time Magazine, CNN News, Science Daily and Science Now have also run stories on the study.

 

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