The Relationship Between Social Media Data and Stock Market Volatility

Abstract

In recent years, the influence of social media data on the stock market has been deeply concerned and studied by academics and professionals, because the information reflected in these data has become increasingly important in contemporary society. By offering a complete synthesis of current research, evaluating the contributions made by earlier studies, and highlighting knowledge gaps warranting additional inquiry, this literature review seeks to examine the complicated link between social media data and stock market volatility. In order to accomplish this, the paper delves into a wide range of topics, such as where to get social media data, how to gauge stock market volatility, and what kinds of approaches have been taken to examine the possible connections between the two. Some research suggests that social media sentiment may forecast market patterns, while other research suggests a lower effect, as shown by our study, which concludes that there is either no relationship or a positive one between these factors. More study should focus on perfecting sentiment analysis methods, delving into nonlinear correlations, exploring variations in social media platforms, and addressing ethical problems in data utilization. We hope that these efforts will help us better comprehend the relationship between social media data and stock market volatility, allowing us to create more precise forecasting instruments.