Tracking Shifts in Market Emotion: The Power of Raw-S Acceleration

Introduction

In financial markets, investor sentiment changes constantly — and the speed of those changes can be just as informative as their direction.

At Context Analytics, we measure investor tone through our proprietary Raw-S metric — a raw sentiment  metric that captures the emotional tone of investor conversation around each ticker.

While standard sentiment scores summarize whether investors are bullish or bearish, Raw-S Acceleration measures how quickly that mood itself is shifting — revealing when crowd emotions are building momentum or losing steam.

What Is Raw-S?

Raw-S represents the unnormalized aggregate sentiment of all messages related to a company on a given day.

Unlike normalized metrics (such as S-Score or SV-Score), Raw-S represents the true magnitude of the day’s emotional tone.

• A high positive Raw-S indicates strong optimism or enthusiasm in investor conversation.
• A large negative Raw-S indicates intense pessimism or criticism.

Raw-S thus serves as the foundation of Context Analytics’ sentiment S-Factor framework.

From Sentiment to Acceleration

Markets don’t just respond to whether investors are positive or negative — they react to changes in that sentiment, and more importantly, to how fast those changes occur.

To capture this behavioral dynamic, Context Analytics defines Raw-S Acceleration as the second difference of Raw-S. 

Formula

Let  represent the Raw-S value for a given ticker on day t.

1. Sentiment Momentum (the first derivative):
   
2. Sentiment Acceleration (the second derivative):
   

Here:

• (> 0) → positive acceleration (sentiment improving faster)
• (   < 0) → negative acceleration (sentiment deteriorating or slowing)

This second-order change captures the speed of change in collective investor emotion — an important signal of when attention and conviction are beginning to inflect.

Daily Portfolio Methodology

Each trading day, we calculate Raw-S Acceleration 20 minutes prior to market close for all stocks in the price > $5 universe and form five quintile portfolios:

• Q1: Lowest acceleration — sentiment decelerating or reversing.
• Q2–Q4: Intermediate levels of sentiment change.
• Q5: Highest acceleration — sentiment rapidly strengthening.

We then measure next day returns for each quintile to assess the relationship between sentiment acceleration and subsequent price performance.

Results Since 2019

From January 2019 through October 2025, Raw-S Acceleration has produced a near monotonic performance spread across quintiles:

• Q1/Q2 (lowest acceleration) stocks consistently underperformed.
• Q5 (highest acceleration) stocks consistently outperformed.
• The Q5 – Q1 spread generated a persistent, positive cumulative return over the full period.

In other words, companies experiencing the strongest positive acceleration in Raw-S — rapid increases in collective optimism — have tended to see their share prices outperform in the days ahead.

This near monotonic pattern suggests that acceleration captures a real and persistent behavioral effect: markets reward increasing enthusiasm in addition to static positivity.

Interpretation

Raw-S Acceleration highlights moments when investor emotion begins to gain velocity.
Such bursts of attention and conviction often precede price momentum, as crowd awareness and participation expand.

Conversely, when acceleration turns negative — sentiment growth slowing or reversing — it often signals fading conviction and near-term underperformance.

This makes Raw-S Acceleration a valuable component in both alpha generation and risk monitoring frameworks.

Conclusion

Since 2019, Context Analytics’ Raw-S Acceleration metric has exhibited a stable, monotonic relationship with future returns:

Stocks with accelerating positive sentiment outperform, while those with decelerating sentiment lag underperform.

By quantifying not just how investors feel, but how fast those feelings are changing, Raw-S Acceleration transforms unstructured conversation into a measurable, forward-looking behavioral signal. This is just one of many ways to engineer signals from our S-Factor feed to capture different aspects of the social market.

For more information, visit www.contextanalytics-ai.com .