As shown on the above graph, some companies are clearly mentioned more in the media than others. If we define a correlation coefficient between stock price progression and media trend (which you can read more about at the end of the post) we can compare media coverage with this stock-trend coefficient:

The closer the coefficient is to zero the stronger the relationship between stock price progression and media trend is for that company. The coefficient seems to get progressively smaller when media coverage gets larger. This is interesting! It means that for companies with more media coverage the stock price is more likely to be fluctuating if the company is trending. While companies with less media coverage can fluctuate on the market without it showing in the media trend.

A closer look

Since Equinor (EQNR) is the company with the most media coverage let’s compare the Equinor stock with its trend score.

It is clear that the correlation is not always the same strength. When our correlation is weak, there might be other explanations as to why the trend score suddenly jumps. Simply looking at what the media is writing about a company could explain why the trend score made this jump, while the stock price didn’t. Lets look at a key date from our Equinor-case; 2018–08–29. Around this date the trend score made a sudden jump, while the stock price remained more or less stable. Extracting the actual news stories about Equinor in the period around 2018–08–29 we see that the jump in trend score was maybe not so odd. For example, news arrived that Equinor had decided to invest a substantial amount of money in Brazil. This made headlines, but the market didn’t react in a substantial way.

What about companies with lower media coverage? Lets take a look at the fourth most mentioned company, Norwegian Air Shuttle (NAS):

In this graph a correlation is easier to spot! One interesting thing to note is that the trend score does not seem to be affected by the sudden fall from September to mid October. Why is this? If we take a look at the whole OBX index we can spot why:

The OBX index

The whole index actually fell rapidly from early October onwards (as did pretty much every major index in the world). The fact that Norwegian fell too is not something unique, therefore the trend score remaining stable might not be such a surprise.

Finally, we can take a look at a company with significantly less media coverage: Aker BP (AKERBP).

The AKERBP stock price does not show a clear correlation with its trend score. The correlation coefficient is in fact 2.4182, which when we compare it to EQNR and NAS is significantly worse.

The how’s and why’s

Because the OBX index consists of the 25 most liquid shares on the Oslo Stock Exchange we are using this index as the base for our analysis. When extracting media coverage data from the Mito.ai backend we get the following table:

The media coverage data extracted from the Mito.ai backend

Each cell represents the number of news stories about that company at a given time-interval. The reason for the seemingly low article counts is because our backend uses sophisticated clustering techniques to ensure wide-spread events are only counted as a single story. We also use a relevance filter to make sure only articles that are in fact relevant for each company is counted. It is also worth mentioning that although we do analyze content in multiple languages, we’ve only looked at Norwegian news stories for this particular blog post.