ISSN: 1648 - 4460

International Journal of Scholarly Papers

VU KHF

Transformations  in
Business & Economics

Transformations in
Business & Economics

  • © Vilnius University, 2002-2022
  • © Brno University of Technology, 2002-2022
  • © University of Latvia, 2002-2022
Article

THE IMPORTANCE OF SENTIMENT IN EVALUATION OF CORPORATE BOND PRICE
Marek Vochozka, Lenka Novotna, Michal Hovanec

ABSTRACT: Behaviour of individual assets in financial market is currently determined mainly by specific news, which i now easy to look up. Market environment is also affected by investors´ emotions, both positive, which affect market environment positively, and negative, which have the opposite effect. Based on the information from the official Twitter accounts of airlines, classification and correlation analyses were used to conduct research, whose results indicate that in the evaluation of bonds, news sentiment is insignificant; the essential predictor for future bond price is time. Negative or positive information about issues is reflected very quickly in bond price, with the time lag of one day. Bond price rises with the increasing news sentiment and vice versa. It is thus clear that both news sentiment value and time factor need to be taken into account. The limitation of the results is the individual perception of the strength of emotions the individual information bears. Moreover, the results might be distorted by an incomplete set of information available for the purposes of the research, as well as by the fact that the effect of time and sentiment were examined using multilayer perceptron neural networks, which are able to detect the correlation of two and more variables even in the case of a higher degree of non-linearity. Time thus plays a more important role than sentiment, which did not provide clear patterns of behaviour.

KEYWORDS:  sentiment, bond, issuer, airlines.

JEL classification:  C22.

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Scholarly papers Transformations in Business & Economics
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Vilnius University
Muitinės g. 8
Kaunas, LT-44280
Lithuania

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