Market forecast for query statistics Google Domestic Trends

    A year ago, scientists from Google revolutionized epidemiology when they identified the pattern of search queries that is characteristic of a person infected with influenza ( scientific work in PDF ). Accordingly, by analyzing the entire volume of search queries, it was possible to accurately predict the influenza epidemic about two weeks before it begins. So the Google Flu Trends service appeared .

    In research laboratories Google decided not to stop there. If we can predict the flu epidemic by search queries, then it’s generally easy to predict the movement of stock indices, they decided, wrote another scientific paper ( PDF ) and launched a new feature on Google FinanceGoogle Domestic Trends , designed specifically for investors.

    The idea is that search queries are a leading indicator for the stock market, just as they are a leading indicator for the flu epidemic. These phenomena (strong market movement and a viral epidemic) are generally similar to each other in many ways.

    Google Domestic Trends uses a similar principle to analyze the state of an economic sector. For each sector, a set of characteristic keywords is identified, and then a graph is built according to the number of search queries. We immediately see how the public’s interest in this sector is changing, and we can make assumptions about how the demand for the corresponding stocks will change.

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