A Search Engine Trading System, 07/15/07
For the past week I've been running MSFT's Live Search and Google side-by-side and I
found the comparative search results fascinating - Peter Norvig appears to have been a _very_ good hire.
I've switched and am now comparing Yahoo Search and Google. At first glance the results are much more equal,
although the YHOO results are taking about twice as long to be returned.
Yahoo Search ,
As the relationship between the value of the search results for MSFT, YHOO and GOOG change,
comparing the relative value of the search results should make for a nice systematic trading opportunity.
Here's the pseudo code for a search engine trading system:
1. Each week, download the top search terms from the web
2. Run each search term through each search engine, grab the results and compare identical items on the first page
3. Score each engine on it's closeness to the GOOG results
4. As the score gap with Google narrows, adjust the relative weighting of the two/three stocks, pairs trade, etc.