For the 200 largest companies by market capitalization representing major sectors in SP500, we categorize and extract sentiment and attention data from publicly available online sources, covering areas such as earnings, products and services, industry trends, and analyst opinions. For each sentiment category, we construct a portfolio consisting of 10 equally weighted stocks with the highest combined sentiment score x attention value. The sentiment scores are claculated on a -10 - 10 scale, while attention represents the percentage of media coverage for that category relative to the company's total media coverage. Every portfolio is rebalanced on the last trading day of each month.

In 2025, the Industry Trend Portfolio returned 58.89%, significantly outperforming the SPY, which returned 16.34%. In contrast, the Analyst Opinions Portfolio delivered only 15.14%. Here's the monthly holdinds for Industry Trend Portfolio 2025.The sub-portfolios consisting of top 5 holdings, top 6-10 holdings, and top 11-15 holdings generated returns of 64%, 51%, and 38% respectively.

The annualized Sharpe ratio of the portfolio in 2025 is 2.27 (0.66 monthly). An annualized Sharpe above 2 is exceptional by equity standards. The annualized Sharpe ratio of the SPY in 2025 is 1.11 (0.32 monthly).

A strong positive sentiment toward industry trends is often followed by favorable industry-wide developments, company-specific news, analyst upgrades, and subsequent stock price surges.

Because sentiment and attention change daily, it is crucial to select stocks that maintain consistently high sentiment and attention over several days, while also incorporating your own technical and fundamental analysis. The Industry Trend Portfolio is intentionally constructed with simplicity to provide a clear and effective performance comparison.

The portfolio has a highly positive sentiment towards Industry Trend (6.9) compared with the broad market (3.9), and the average attention (20%) is also much higher than the broad market (14%). The average price level of 54 is a good entry point for the portfolio. Standard Deviation (Std Dev) measures the fluctuation of the prices. About two-thirds of daily price changes are within one standard deviation, and about 95% of daily price changes are within two standard deviations. The portfolio is highly volatile (std dev at 6.09%) compared with the subdued broad market (std dev at 0.63%).