Reference no: EM133081239

Question 1: Analysis of Google Trends

Google Trends (https://trends.google.com/trends/explore) is a tool that allows users to analyze the search volume related to certain keywords with focus on specific geographical locations and specific timeframes (e.g. the past 12 months). As will be seen in this course the information that Google Trends provides can in principle be used to predict a wide range of economic and social phenomena. For this question you will use Google Trends to gauge investor sentiment in Canada over the past 12 months." 

1. Use the search volume related to two keywords,  "bullish" and "bearish" compare the two market trends in Canada over the past 12 months. Copy and paste the graph as part of the assignment. Comment on the relationship between the two search volumes.
2. Based on the trends depicted in the graph in part(a) would you consider the market to be more bullish or more bearish? Explain.
3. Now let us focus on the bullish market. In the bullish case we would expect the following keywords to dominate in terms of search volumes: "what stocks to buy", "top stocks", "buy stocks" and "how to invest".  Use these four keywords to assess to asses trends in the search volumes. Copy and paste the graph as part of your assignment.
4. Would you expect the trends you found in part (c) to be correlated with the trend in the stock market index (e.g. the TSE composite) in Canada? What would you expect the correlation to be (i.e. positive or negative)?
5. Would you consider the volume search data obtained in parts (a) and (c) to be perfect measures of investor sentiment? Briefly explain.