While trading is a hobby of mine, my real work revolves around crunching and acting on data provided by Internet giants, such as Google, Facebook and Twitter. As I'm aware this data is a hot topic in the trading community, I wanted to share a few useful resources for analysing stocks using search & social data.
Why use search & social data?
I've always been an advocate of 'focus on what people do, not what they say'. A lot of the information we hear about companies is hearsay and based on pure speculation. The reason why social & search data is so valueable is because, much like a company's financials, the numbers speak for themselves.
If there are 1,000 Google searches per day made by people looking to open a bank account and 700 of them include 'Barclays' in their search query, we can make an assumption that Barclays are in a strong position to dominate this market. This data becomes incredibly useful when we compare competing brands over a number of years in different regions.
Which company is most searched for?
One of the first things to check when considering whether to buy a stock is the trend of online searches around their brand. Using Google Trends, this data will tell you whether the company is gradually increasing or decreasing in popularity, as well as a rough idea of their market share relative to competitors. This data can be easily segmented by country to see which areas people are searching for different brands around the World.
For example, here we can see that Barclays were the clear leader online for many years, although they're now facing stiff competition from Lloyds.
When we dig into the regional analysis in greater detail we can see that while all of the banks have a European focus, Barclays have the largest global influence, with relatively high search volumes in a number of countries outside of Europe.
This data is not limited to companies. In fact, virtually anything that is searched in Google can be viewed on Google Trends. If you wanted to see how the rising binary options trend has swept the globe you can clearly see the exponential growth in popularity this form of trading has gained…
