Trust levels can be used to predict future share prices.
That’s according to Ross Jackson, Associate Partner at EY, who told ELN the firm’s new trust modelling tool allows speculators to accurately predict market fluctuations in share price at least two weeks in advance.
He said the company’s research proves trust has “a very tangible correlation” with share price performance, particularly in the FTSE 100.
He notes the technology works by gathering a “huge” amount of data from news, social media and other sources, before this is passed through a trust analytics model and compared against historical data – he claims in certain cases, it can even make precise share price predictions up to 60 days in advance.
He adds EY is now carrying out further, more detailed research into these machine learning techniques, which use the convergence of digital data, an increase in computing power and the “fundamental” concept of trust to provide a highly-valuable lens of analysis for investors.
He told ELN: “Let’s say you have a portfolio of assets under management, you can then understand how they’re performing in terms of trust and anticipate their future financial performance.”