Recent work suggests that sentiment traders shift from safer to more speculative stocks when sentiment increases. Exploiting these cross‐sectional patterns and changes in share ownership, we find that sentiment metrics capture institutional rather than individual investors’ demand shocks. We investigate the underlying economic mechanisms and find that common institutional investment styles (e.g., risk management, momentum trading) explain a significant portion of the relation between institutions and sentiment.
No takes yet. Share an insight, caveat, or question.
DeVault et al. (2018) studied this question.
Synapse has enriched 5 closely related papers on similar clinical questions. Consider them for comparative context: