Remember that Twitter powered hedge fund we told you about? Well, that fund by Derwent Capital just finished its first month, and apparently, it managed to beat the market during that period, according to a report by eFinancialNews.

At the end of July, the Twitter powered hedge fund, which uses sentiment analysis on the data extracted from tweets, returned 1.85% in its first month, compared to the S&P 500 which fell 2.2%. Average hedge fund returns in that period were 0.76%.

When it was first launched in December 2010, many believed that it was just a gimmick. But then it raised £25 million, which told everyone that they were serious.

It works by analyzing tweets at random, at categorizing them in different moods like “happy”, “sad” etc. After performing analysis on almost 10% of the available tweets, the technology powering the fund makes predictions about the direction of the market. The initial research shows that the algorithm has been able to predict the movements with almost 88% accuracy.

Looks like everyone has been able to find a way to make money off Twitter and its data, except Twitter itself.

I wouldn’t be surprised if some more social media powered hedge funds launch in the coming months. After all, it does seem to be working.