Practical Application of Sentiment Indicators in Financial Analysis: Behavioral Finance Approach
Practical Application of Sentiment Indicators in Financial Analysis: Behavioral Finance Approach

Author(s): Zuzana Rakovská, Martin Svoboda
Subject(s): Business Economy / Management, Behaviorism, Accounting - Business Administration, Socio-Economic Research
Published by: Masarykova univerzita nakladatelství
Keywords: sentiment indicator; behavioral finance; heuristics and biases;
Summary/Abstract: Behavioral finance assumes that individual financial decisions are influenced by emotions and mood. A public sentiment and its effect on collective decision-making have been studied in a number of publications giving the vast variety of research design. This paper examines various techniques in measuring market sentiment and its applications in analysis of financial data. Using a qualitative, exploratory approach, the study identifies trends in sentiment indicators and also tries to analytically categorize heuristics and behavioral biases connected to public mood.

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