Well I came away from the Sentiment Analysis Symposium very excited about all the applications of sentiment that were presented. One of the best talks discussed stock price fluctuations as a function of document-level sentiment viewed over time (from media sources). This is of course a very powerful application – depending upon its reliability. I had no doubt even before hearing this talk that sentiment analysis consumers were going to have a large appetite for this kind of application. One thing that struck me in particular though was how the “semantic scope” of sentiment might be expanded – what could anyone add to the financial analysis of unstructured data in this area that could be interesting. Or is it all and only what “people” (I include pundits in this designation) “think” of a company?

For example, while it might seem superficially that only “positive” and “negative” have any application to sentiment analysis in finance, this is, I believe, not the case. For example, if we expand to other types of oppositions we see some interesting types of document analyses that could be very useful. Let’s take a simple event opposition like “buy” vs. “sell” – or its dispositional relative “long” vs. “short”. What if we applied that to topics on a document level or entities on a sentence level? Would it be nice to see the groups that are long on gold and short on t-bills – or turn that into grouping “contrarian” vs. “conventional” positions? OK so maybe things like this are already covered in structured data and available on Bloomberg but what about more subtle oppositions like “expanding”/’growing” or “retracting”/”shrinking”. These oppositions are much more likely to be discussed in quotes from corporate leaders and reported in the media – often echoed in the text of “forward looking statements” of annual reports. Now this sort of thing gets a little more difficult for the quants to pick up without language analysis, and, I would say, a nice addition to the greater SA offering. Now I am sure I will have colleagues laughing at my giddy insistence on putting the cart before the horse – after all, traditional sentiment analysis accuracy testing is still controversial – but, hey, it’s my blog and I’ll dream if I want to.