TITLE:
Investigating Relationship between Google Index and Corporate Profit Using Random Forest
AUTHORS:
Fong-Ching Yuan, Chao-Hui Lee
KEYWORDS:
Internet, Google Index, Random Forest, Financial Performance
JOURNAL NAME:
Applied Mathematics,
Vol.9 No.1,
January
26,
2018
ABSTRACT:
An automatic analysis of financial figures is common way for investors to
analyze financial reports. However, using solely financial statements does not
represent the comprehensive financial story of a company. Recently, many
people express their opinions and search for information on the Internet. The
adoption of the Internet has generated another type of data for analysis, i.e.
Google Index. The purpose of this research is to prove Google Index is a good
indicator for investors to analyze companies’ status. In this study, random
forest (RF) is used to investigate the relationship between company’s financial
performance and financial ratios and Google Index. From the results of RF
model, we can see Google trend also plays a major role in determining the
company’s profit except the stock index and operating margin.