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Abstract

The rapid growth of social media platforms, particularly Twitter, has given rise to a new avenue of research exploring the intersection between online sentiment and financial market dynamics. This thesis investigates the relationship between the Twitter activity of Cathie Wood, a prominent figure in the financial industry, and the performance of her exchange-traded fund, ARK Innovation ETF (ARKK). By analyzing a comprehensive dataset spanning from August 2, 2021, to January 31, 2024, the study aims to uncover potential correlations between the frequency and sentiment of Wood's tweets and the volatility and returns of ARKK. The research employs regression analysis techniques, focusing on the beta of ARKK and the positive sentiment scores of Wood's tweets as dependent variables, while considering tweet frequency and ARKK's returns as independent variables. While the results did not yield statistically significant relationships between tweet sentiment and ARKK's performance, the study provides a valuable foundation for further exploration in the field of social media sentiment analysis and its application to financial markets. The findings contribute to the growing body of literature examining the intersection of social media and financial markets, highlighting the complexities and limitations inherent in such analyses. The thesis underscores the importance of considering a broader range of potential influencers and the need for creative approaches in future research endeavors.

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