The effects of twitter sentiment on renewable energy stock's returns : a Portuguese study about EDP renováveis stocks
Autor(a) principal: | |
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Data de Publicação: | 2023 |
Tipo de documento: | Dissertação |
Idioma: | eng |
Título da fonte: | Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) |
Texto Completo: | http://hdl.handle.net/10400.14/43582 |
Resumo: | Investors’ rationality in the decision-making process has been topic of discussion in the last decades due to conflicts between schools of thought. Several anomalies in the Efficient Market Hypothesis (EMH) led to a new line of thought in the matter of rationality called behavior finance. Sentiment analysis is one branch of this new school of thought who studies investors’ emotions influence on economic variables. There is no consensus between academics if these emotions can make the investment decision biased or not. The aim of this paper is to observe if the prevailing sentiment in tweets can predict the stock returns for a renewable energy company of the Portuguese market. This study looks at the second biggest company by capitalizations of the Portuguese market, EDP Renováveis (EDPR), in the period from the June 1st 2021, to June 1st 2022, and finds no significant evidence of a relationship between Twitter mood and EDP Renováveis stock returns. The reasons for this result might be explained by EDPR belonging to a very small and concentrated market, corroborating the existing theory, as well as the stakeholder composition of the company only having a very small percentage of individual investors, being this kind of investors the most influenced by biases and heuristics present in the tweets. These findings have implications for the development of the sentiment analysis theory, giving more details of the influence of sentiment in smaller and concentrated market, in the renewable energy branch, and in the period of the beginning of the war between Ukraine and Russia and the worldwide economic recovery from the Covid-19 pandemic. |
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The effects of twitter sentiment on renewable energy stock's returns : a Portuguese study about EDP renováveis stocksBehavioral financeSentimentSentiment analysisTwitterRenewable energiesReturnsFinanças comportamentaisSentimentoAnálise sentimentalEnergias renováveisRetornosDomínio/Área Científica::Ciências Sociais::Economia e GestãoInvestors’ rationality in the decision-making process has been topic of discussion in the last decades due to conflicts between schools of thought. Several anomalies in the Efficient Market Hypothesis (EMH) led to a new line of thought in the matter of rationality called behavior finance. Sentiment analysis is one branch of this new school of thought who studies investors’ emotions influence on economic variables. There is no consensus between academics if these emotions can make the investment decision biased or not. The aim of this paper is to observe if the prevailing sentiment in tweets can predict the stock returns for a renewable energy company of the Portuguese market. This study looks at the second biggest company by capitalizations of the Portuguese market, EDP Renováveis (EDPR), in the period from the June 1st 2021, to June 1st 2022, and finds no significant evidence of a relationship between Twitter mood and EDP Renováveis stock returns. The reasons for this result might be explained by EDPR belonging to a very small and concentrated market, corroborating the existing theory, as well as the stakeholder composition of the company only having a very small percentage of individual investors, being this kind of investors the most influenced by biases and heuristics present in the tweets. These findings have implications for the development of the sentiment analysis theory, giving more details of the influence of sentiment in smaller and concentrated market, in the renewable energy branch, and in the period of the beginning of the war between Ukraine and Russia and the worldwide economic recovery from the Covid-19 pandemic.A racionalidade dos investidores no processo de decisão de investimento tem sido tópico de discussão nas últimas décadas devido ao conflito entre duas linhas de pensamento diferentes. Várias anomalias que não iam de encontro com a hipótese do mercado eficiente deram origem a uma nova escola de pensamento em relação à racionalidade dos investidores chamada de finanças comportamentais. Análise de sentimentos é um dos ramos desta nova linha de pensamento que estuda a influência das emoções dos investidores em diferentes variáveis económicas. Não existe consenso entre académicos se estas emoções conseguem enviesar as decisões de investimento ou não. O objetivo desta tese é observar se o sentimento presente em tweets consegue fazer prever os retornos das ações de uma empresa de energias renováveis do mercado português. Este estudo analisa a segunda maior empresa portuguesa por capitalizações, a EDP Renováveis (EDPR), no período temporal entre o dia 1 de junho de 2021 e o dia 1 de julho de 2022, e não encontrou evidência com significância de uma relação entre o estado de espírito do Twitter e os retornos das ações da EDP Renováveis. As razões que justificam estes resultados podem ser o facto da EDPR pertencer a um mercado muito pequeno e concentrado como o português, indo de encontro com a evidência empírica, assim como a composição dos proprietários das ações da empresa ter uma percentagem muito reduzida de investidores individuais, que são o tipo de investidor mais facilmente influenciado por heurísticas presentes nos tweets. Este resultado tem implicações para o desenvolvimento da teoria de análise do sentimento, dando mais detalhes da influência deste em mercados mais pequenos e concentrados, no ramo das energias Renováveis, no período de tempo do início da guerra entre a Ucrânia e a Rússia e a recuperação financeira mundial pós-Covid-19.Ferreira, Mário Pedro Leite de AlmeidaVeritati - Repositório Institucional da Universidade Católica PortuguesaBarros, Diogo Fragata2024-01-11T16:11:47Z2023-10-302023-062023-10-30T00:00:00Zinfo:eu-repo/semantics/publishedVersioninfo:eu-repo/semantics/masterThesisapplication/pdfhttp://hdl.handle.net/10400.14/43582TID:203439015enginfo:eu-repo/semantics/openAccessreponame:Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)instname:Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informaçãoinstacron:RCAAP2024-01-16T01:46:43Zoai:repositorio.ucp.pt:10400.14/43582Portal AgregadorONGhttps://www.rcaap.pt/oai/openaireopendoar:71602024-03-20T01:44:40.842928Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) - Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informaçãofalse |
dc.title.none.fl_str_mv |
The effects of twitter sentiment on renewable energy stock's returns : a Portuguese study about EDP renováveis stocks |
title |
The effects of twitter sentiment on renewable energy stock's returns : a Portuguese study about EDP renováveis stocks |
spellingShingle |
The effects of twitter sentiment on renewable energy stock's returns : a Portuguese study about EDP renováveis stocks Barros, Diogo Fragata Behavioral finance Sentiment Sentiment analysis Renewable energies Returns Finanças comportamentais Sentimento Análise sentimental Energias renováveis Retornos Domínio/Área Científica::Ciências Sociais::Economia e Gestão |
title_short |
The effects of twitter sentiment on renewable energy stock's returns : a Portuguese study about EDP renováveis stocks |
title_full |
The effects of twitter sentiment on renewable energy stock's returns : a Portuguese study about EDP renováveis stocks |
title_fullStr |
The effects of twitter sentiment on renewable energy stock's returns : a Portuguese study about EDP renováveis stocks |
title_full_unstemmed |
The effects of twitter sentiment on renewable energy stock's returns : a Portuguese study about EDP renováveis stocks |
title_sort |
The effects of twitter sentiment on renewable energy stock's returns : a Portuguese study about EDP renováveis stocks |
author |
Barros, Diogo Fragata |
author_facet |
Barros, Diogo Fragata |
author_role |
author |
dc.contributor.none.fl_str_mv |
Ferreira, Mário Pedro Leite de Almeida Veritati - Repositório Institucional da Universidade Católica Portuguesa |
dc.contributor.author.fl_str_mv |
Barros, Diogo Fragata |
dc.subject.por.fl_str_mv |
Behavioral finance Sentiment Sentiment analysis Renewable energies Returns Finanças comportamentais Sentimento Análise sentimental Energias renováveis Retornos Domínio/Área Científica::Ciências Sociais::Economia e Gestão |
topic |
Behavioral finance Sentiment Sentiment analysis Renewable energies Returns Finanças comportamentais Sentimento Análise sentimental Energias renováveis Retornos Domínio/Área Científica::Ciências Sociais::Economia e Gestão |
description |
Investors’ rationality in the decision-making process has been topic of discussion in the last decades due to conflicts between schools of thought. Several anomalies in the Efficient Market Hypothesis (EMH) led to a new line of thought in the matter of rationality called behavior finance. Sentiment analysis is one branch of this new school of thought who studies investors’ emotions influence on economic variables. There is no consensus between academics if these emotions can make the investment decision biased or not. The aim of this paper is to observe if the prevailing sentiment in tweets can predict the stock returns for a renewable energy company of the Portuguese market. This study looks at the second biggest company by capitalizations of the Portuguese market, EDP Renováveis (EDPR), in the period from the June 1st 2021, to June 1st 2022, and finds no significant evidence of a relationship between Twitter mood and EDP Renováveis stock returns. The reasons for this result might be explained by EDPR belonging to a very small and concentrated market, corroborating the existing theory, as well as the stakeholder composition of the company only having a very small percentage of individual investors, being this kind of investors the most influenced by biases and heuristics present in the tweets. These findings have implications for the development of the sentiment analysis theory, giving more details of the influence of sentiment in smaller and concentrated market, in the renewable energy branch, and in the period of the beginning of the war between Ukraine and Russia and the worldwide economic recovery from the Covid-19 pandemic. |
publishDate |
2023 |
dc.date.none.fl_str_mv |
2023-10-30 2023-06 2023-10-30T00:00:00Z 2024-01-11T16:11:47Z |
dc.type.status.fl_str_mv |
info:eu-repo/semantics/publishedVersion |
dc.type.driver.fl_str_mv |
info:eu-repo/semantics/masterThesis |
format |
masterThesis |
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publishedVersion |
dc.identifier.uri.fl_str_mv |
http://hdl.handle.net/10400.14/43582 TID:203439015 |
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http://hdl.handle.net/10400.14/43582 |
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TID:203439015 |
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eng |
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eng |
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openAccess |
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Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informação |
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Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) |
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Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) - Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informação |
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