Peter Burghof; Sebastian Schroff.;Ulli Spankowski
The sentiment of financial market participants – that is their feelings, moods and opinions – often dominates investment decisions and drives security prices. Hence, systematically extracting and analyzing this sentiment can be a valuable information source to better assess market movements and detect risk-bearing situations. We propose a compehensive approach on the sentiment analysis process in the financial market context. Further, we outline different approaches to extract financial market sentiment from unstructured data. We introduce three application fields on how this sentiment can be employed to enhance financial decision making in various areas of investing, banking and market supervision. Moreover, we critically evaluate technical limitations and potential threats and risks associated with automated sentiment analysis.