Fri, Apr 18, 2014
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Alternative Market Briefing

Derwent Capital's 'Twitter fund' sees negative sentiment and expects downturn

Monday, July 25, 2011

amb
Paul Hawtin
From Kirsten Bischoff, Opalesque New York:

This year, one of the launching funds that received its fair share of attention was a fund often referred to as "the Twitter fund". Launched by London-based Derwent Capital, the first sentiment-based hedge fund started official operations on July 1st and was inspired by an academic paper titled Twitter Mood Predicts the Stock Market" , by Professor John Bollen of Indiana University and two co-authors (Huina Mao and Xiao-Jun Zeng).

What the paper found was that the change in sentiment on Twitter was three days ahead of [movement] of the Dow Jones, explained Derwent Capital’s Founder and Fund Manager Paul Hawtin during a recent interview with Matthias Knab on Opalesque TV. "It was an amazing discovery and even to this day we still do not fully understand the correlation between [Twitter and the Dow] and why we see that correlation but we are starting to understand it in a bit more detail," Hawtin says.

With six months trial behind them, the accuracy with which the firm has been able to predict the daily direction of the Dow has been 80%-90%, and those results were what drove the firm to launch the Derwent Absolute Return Fund.

Hawtin, whose background is in quantitative trading, explains that th......................

To view our full article Click here

Banner
Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing
  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. Opalesque Exclusive: Classic Auto Funds Limited (CAF) launches several car investing funds[more]

    Bailey McCann, Opalesque New York: A new trend in alternative alternatives is emerging - car appreciation funds. Classic Auto Funds Limited (CAF) is the first to market with several funds that make super elite luxury cars into real asset investments. As a result of growing overseas demand couple

  2. Investing – Big hedge funds bought Puerto Rico's junk bonds, Fidelity explores new trading venue amid flash trade concerns, Crisis-era Greek bonds reward early buyers with big effective returns, Cargill unit discloses stake in Freddie preferred[more]

    Big hedge funds bought Puerto Rico's junk bonds From Reuters.com: Several large hedge funds doubled down on Puerto Rico in last month's giant bond sale despite the U.S. territory's financial struggles, the Wall Street Journal reported, citing confidential documents reviewed by the newspa

  3. Opalesque Exclusive: Hedge fund replicators evolve[more]

    Bailey McCann, Opalesque New York: Hedge fund replicators as a group of products tend to get a bad rap from hedge fund managers who suggest that the best a replicator can offer is dynamic beta capture. A

  4. Opalesque Exclusive: Pensions, endowments, family offices reconsider life settlement investments[more]

    Bailey McCann, Opalesque New York: Hedge funds were once the largest investors in the life settlement industry, now the industry is seeing more interest from pensions, endowments and family offices directly. Life settlements have always been considered a niche part of the investing landscape, an

  5. SEC allows investment funds to use social media[more]

    Bailey McCann, Opalesque New York: The Securities and Exchange Commission (SEC) has released new guidance letting investment funds and advisors use social media to promote client reviews. The guidance seeks to assist investment managers in developing compliance policies and procedures reasonably