Learning Stock Sentiment Analysis To Tailor Business Decisions

Stocks and investing are more accessible to non-experts than ever before because there are so many new ways to invest. However, this means people are getting their information from everywhere instead of the old-guard resources. With the widening availability of investing through apps for investing beginners like Robinhood and SoFi, there’s more journalism and advice pieces about how to start investing and where the best place to put your money is (and will be in the future). For business owners, stock sentiment analysis is essential to understand how customers are viewing your company and what buying tendencies are being recommended to people.

Sentiment analysis is a pretty common tactic for companies that want to understand how they’re being discussed. It’s super important for understanding how customers, newspapers, and the Internet in general sees a company. Responding to complaints and knowing what works is more important than ever, especially for encouraging stock buying. Today on the blog, we’re going over how to conduct a strong stock sentiment analysis and integrate it into your business plan.

What is Sentiment in the Stock Market?

Sentiment analysis is a science-based way of finding out what people think and understanding it in a data-centric way. You can collect sentiment through a lot of different data points, and then analyze the text through classifying words as positive and negative associations. In this kind of analysis, the emphasis is on the positive or the negative (as opposed to neutral language) so it is easier to understand where a company is excelling or there is room for growth.

There are a few different reasons that companies will incorporate sentiment analysis into their business plans. If you have a website where you sell products and allow customers to review them, you want to keep an eye on those and understand where the positive and negative feelings are coming from. Do customers generally like the product, but hate how slow shipping is? Are the packages coming intact with the correct items?

You can also use sentiment analysis to keep on top of competition through dynamic pricing. If you’re pulling reviews of products from competitors and see that most people are complaining about the price point, you can use that to advertise your products and services to people who are disappointed in price points of competitor companies.

Finally, if you have a very public-facing company, you should do sentiment analysis through the news that is about your company and your industry. If there are scandals around companies not being open with their consumers or their unethical business practices, that can spur your company to work on press releases that are open about your practices and encourage consumer trust. This is incredibly important for market sentiment analysis when so many industries are so highly competitive.

Stock market sentiment indicators are easier to find these days because there’s so much online information you can sift through. A stock sentiment analysis is the analysis of collected data to understand how negatively or positively people are feeling about the stock of the company (from price to company reputation and more). Financial news websites have a wealth of information for prospective buyers and owners. We’ll go over the best ways to get all of this information efficiently and get started on your stock sentiment analysis.

How to Do Stock and Finance Sentiment Analysis

For getting a better picture of how people are writing and thinking about the stock market, there are a ton of sources that can help you. Finance sentiment analysis doesn’t only need to go through stock tickets these days: you can find a lot of websites and information through various sources that give stock advice to beginners.

Data collection for stock sentiment analysis

A good stock sentiment analysis starts with getting a lot of information. You need to collect a ton of data to have statistically significant findings after you analyze the positivity/negativity of the language with natural language processing (NLP) and computation linguistics. Even though it’s difficult to analyze sentiment without seeing how someone is reacting with their facial expressions, marketing strategists who do sentiment analysis have gotten really good about filtering about neutral, non-specific language that doesn’t help you direct your future business decisions.

You can start your stock sentiment analysis with a reputable news website like the Financial Times. From there, you can search the website with the company’s stock code and find all of the articles associated with it. If you’re doing a pure headline analysis, you can start to filter out all of the positive and negative words and analyze keywords.

Web scraping for finance sentiment analysis

This is very time-consuming if you collect the data manually. This is where a web scraper comes in. A web scraper (like Scraping Robot) can be directed to collect all of this data and deposit it conveniently in an Excel sheet or .CSV file. This makes it much easier to research and analyze for stock sentiment analysis.

Web scrapers are bots and therefore look suspicious to websites where you’re collecting a lot of information. This doesn’t mean you’re doing anything wrong, but cybercriminals and bad actors on the Internet use bots to steal private data from websites. Collecting headlines and public information is different, but websites are hyper-attuned to banning possible threats.

If you want to make your web scraper look more “human” and avoid bans, you can space out the speed at which you’re having your web scraper make requests so it seems less robotic. You can also choose to do big data collection projects in a few chunks, instead of all at once. This will protect your IP address from getting banned and still get all of the data you need for stock sentiment analysis.

Tools for Stock Sentiment Analysis

Although you can make your web scraper look more human and less robotic, you can also use a proxy to do your stock sentiment analysis. A proxy provides you with a proxy IP address that acts as a barrier to your personal device’s IP address. Proxies are especially helpful for companies that want to protect proprietary research and databases. Making sure that your business’s employees have access to proxies means they’re able to work with a protective level of anonymity.

Proxies also mean that your employees can work from anywhere in the world and still access the websites that are specific to certain countries. You can use a proxy IP address to get around geoblocking by picking where the proxy IP address is located in the world. Even if you’re only operating out of the United States, you can access websites around the world with a global proxy IP address and do different kinds of international research.

A good, reliable proxy provider will also give you a lot more bandwidth for your proxies, too. This means you’ll be able to do a lot more data collection more quickly because of the increased bandwidth. Proxies tend to have faster network speeds because they’re less crowded and able to distribute traffic more effectively.

There a few different proxies that will come up when you start doing research about which one is best to support your stock sentiment analysis. They are dedicated, semi-dedicated, and rotating. Dedicated and semi-dedicated proxies are both one proxy IP address that covers your personal device’s IP address. The difference is that a dedicated proxy is dedicated to one user, while a semi-dedicated proxy has a few different users on it. If you get your semi-dedicated proxy from a reliable provider, you can trust that your fellow users won’t ruin your ability to surf the Internet.

A rotating proxy should be paired with a web scraper for stock sentiment analysis. The rotating proxy switches out new IP addresses as often as you need, and especially whenever your IP address gets banned. Web scrapers work best with rotating proxies, especially if you want to get working more quickly. You don’t have to slow down your web scraper’s proxy requests so it can go more quickly with a rotating proxy.

Finding the Best Proxy for Stock Market Sentiment Analysis

There are a ton of proxy options on the Internet, like free or public ones, but these will end up causing you more problems than solving them. Free and public proxies don’t have any moderation or guarantees that the proxies will stay un-banned from websites you need to access. You also won’t get the benefits of faster network speeds because free and public proxies tend to have a lot of users on them.

At Rayobyte, we offer high-quality proxies and the ability to test them on a trial basis so you can see why it’s so much better to have a good, reliable proxy than a free, broken one. Our enterprise plans have custom plans available so you can find the rotating proxies that are right for you. You can get rotating proxies for as low at $1.98 per IP address on our corporate plan.

Rayobyte has datacenter proxy locations around the world, and therefore has 24/7 customer service to address any issue that might come up for any of our proxy customers. Proxy use has a lot of different cases for different businesses, and if you’re using proxies for web scraping for stock sentiment analysis, you might have a few questions about how to make them work correctly. We also have residential proxies available, which are a great option for web scraping because they are much less likely to get banned by websites.

Overall, Rayobyte is committed to providing the best, most ethically sourced proxies that will help with all of your stock sentiment analysis needs for your business.

Final Thoughts

Now that so many people are empowered to make their own financial and stock decisions, businesses have to understand how to cater to them and communicate information to them. You can find out how people and journalistic outlets are talking about your company and the stock prices and be able to tailor your messaging and prices to those sentiments. Stock sentiment analysis is an integral part of contemporary business practices because there is so much information out there, from companies to people constantly responding to what companies are doing. It’s a great idea to keep up with sentiment analysis to work through the successes and growth opportunities for your company.

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