LLM-Based vs. Lexicon-Based Sentiment Signals for Tail-Risk Detection in Meme Stocks

This paper presents an empirical comparison of lexicon-based and Large Language Model (LLM)-based sentiment analysis for extracting market-relevant signals from social media discourse in highly volatile equity markets. Using Reddit data from r/WallStreetBets and focusing on meme stocks (GME, AMC, NOK), we construct time-aligned sentiment indicators and evaluate their relationship with market returns, with particular attention to extreme positive return events in the upper tail of the return distribution.

Summary generated by The Flow from the publisher's feed. The full article lives at Hugging Face Trending Papers.

• llms
• nlp