Alternative Data Weekly Newsletter Archives

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A curated digest of must-read news from around the internet about alternative data. Join the buy-side professionals already reading the Alternative Data Weekly.

December 2016

The (new) dawn of stat arb

Business Insider

Manoj Narang’s MANA Partners is launching a new hedge fund January 3 with $1 billion AUM. The fund will take advantage of the convergence of previously disparate strategies and data sources to compete in an increasingly crowded space. In particular, Narang believes we are at “the dawn of a new era” with stat arb, thanks to the explosion in the amount of data available for quantitative strategies and the rise of cloud computing. Read More

Scraping data: The next frontier in battle for investment returns

Financial Times

The rise of alternative data is, unsurprisingly, fraught with new challenges. Compliance remains a concern and so does making sense of highly unstructured datasets. Nevertheless, alternative data shows us the closest real-time map of consumer behavior we’ve ever seen. Robin Wigglesworth reports. Read More

Big data sellers fail to hide personal information, say funds

Financial Times

Wigglesworth has been busy. His second piece in the FT posits that alternative data providers may not be doing the work necessary to truly scrub PII from their datasets. Even when the data appears anonymized at first glance, some hedge funds claim that their analysts are easily able to deduce personal information with some light sleuthing. This one is a warning for all of us. Read More

When Donald Trump hate-tweeted Lockheed Martin, hedge funds were ready

Fortune

While sentiment analysis was built by examining millions upon millions of nuggets of unstructured data using complex algorithms and powerful computing, it now seems that its most reliable use stems from looking at the digital trail of just one person: Donald Trump. Lockheed Martin is the latest stock to experience severe movement based on the President-elect’s comments alone. The trick? Getting inside his head. Read More

7PARK DATA releases report on grocery delivery services

Marketwired

Whet your appetite. Alternative data provider 7PARK DATA released a new report that analyzes trends related to online and mobile food and grocery delivery. Based on anonymous mobile app usage of tens of millions of consumers worldwide, the report examines the growing influence of food delivery services on the $536 billion retail restaurant industry. Read More

India’s botched war on cash

HBR

Is this an opportunity to better understand India’s economy? Prime Minister Modi’s surprise November demonetization plan, which saw the removal of Rs 500 and Rs 1,000 notes from circulation, threw the country into chaos. One of the outcomes has been to push citizens into digitizing their transactions. The data exhaust from these digitization efforts may offer sharper insights into an economy that, until now, was close to 90% cash-reliant. Read More

Four companies getting exhaust data right

Quandl

In this post from the Quandl blog, we profile four companies who have successfully created revenue from their exhaust data by selling to retailers, advertisers and the buy side. Yipit, Placemeter, Yodlee and Telefónica made the cut. Read More

7,500 faceless coders paid in bitcoin built a hedge fund’s brain

Wired

Crowdsourced hedge fund Numerai pays anonymous coders in bitcoin, gives away all its data after it’s encrypted and won’t reveal how much its fund has made, except that it’s made something. Enough that the founder of the acclaimed Renaissance Technologies has invested in the company. Is this disruptive? Or so secretive as to be suspicious? Read More

Augmenting FX strategies with volume data

Quandl Blog

If you’re familiar with Bollinger Bands, this post is for you. Using CLS’ FX volume data from Quandl, in-house quant Dennis Kourktchan augmented a basic Bollinger Band strategy. The results show that a volume-augmented variation of the strategy delivers higher risk-adjusted returns (in Sharpe ratio terms) than a pure price strategy. Read More

Buffett, Soros and the role of robotic logic in investing riches

The Globe & Mail

AQR was able to develop algorithms to approximate the performance of Warren Buffet, George Soros and Bill Gross. The company’s automated models performed admirably once tuned to the philosophies of these investment giants. The only one they couldn’t imitate? Fidelity Magellan fund genius Peter Lynch. Read More

Michigan State looks to alternative data

Pensions & Investments

After posting a 4.3% loss in its last fiscal year, the University of Michigan’s endowment is moving $100 million from traditional money management into quantitatively-driven funds. Chief Investment Officer Philip Zecher allocated 50% of the money to Renaissance Technologies, saying he wants to invest in unique data over traditional data or pattern-recognition algorithms. Read More

Can algos trade Trump’s tweets? Absolutely. Maybe.

CNBC

Humans: 1. Computers: 0. Algorithms missed Trump’s tweet about cancelling the government’s Boeing Contract. Or maybe they saw it and their programmed logic said it wasn’t significant. Still, this article reminds us that Twitter is a messy, messy feed full of promise, but also full of rhetoric, sarcasm and other forms of ambiguous sentiment. Read More

Image datasets released by Google to speed machine learning

Imaging & Machine Vision Europe

Image analysis algorithms for finance just got a boost. Google and YouTube are helping researchers create new image analysis techniques by releasing datasets of annotated images and video. The Google dataset has 9 million entries while the YouTube database has 8 million videos or 50,000 hours of footage, all free to use. Read More

Dun & Bradstreet finds a $24 billion opportunity for its data

Forbes

Two hundred-year-old Dun & Bradstreet has been collecting data on global companies longer than most of us have been alive. They have historically operated in an $8 billion market of traditional trade credit and prospecting solutions. But CEO Bob Carrigan has identified a $24 billion addressable market in finance, risk management, and advanced marketing. So he is modernizing the company and moving into Data-As-A-Service. This includes making the data available to capital markets, who can use it to determine – among other things – risk of default for a given company. (Disclaimer: D&B data is available on Quandl) Read More

The latest source of alternative data may be ink

Inverse

Imagine a database that catalogued all the tattoos in the world. What insights – demographic or otherwise – could be gleaned? We’re not sure either, but this is a fascinating project nonetheless. And it’s a reality. Read More

Sharpen your skills at Quandl ADC ’17

Quandl Blog

Quandl’s inaugural Alternative Data Conference will feature some of the most powerful alternative databases available to investors today, along with leading research from this quickly growing field. The event will be at 10 in the Park in New York City on January 17, 2017. Get Updates for the next Alternative Data Conference!

Winton Capital’s David Harding on making millions through math

Financial Times

Seems there is a new hedge fund founder biopic every week. This time it’s Winton Capital’s David Harding, as written by FT. Harding talks math, the science behind quant investing, and their counterintuitive approach: exploiting weak relationships between data and the price of the market. (Which is exactly what was said about Renaissance last week). Read More

Why startups won’t lead the big data revolution

IT Pro

Ouch. But interesting. History is a critical factor to a strong dataset, and Kenneth Cukier posits that only incumbent companies have any history in their data, putting startups with dreams of disrupting the data economy in a position of weakness. Cukier also reiterates that data ownership issues must be resolved for anyone to take advantage of the data economy. Read More

China big-data gurus extend their reach to track economy

BusinessMirror

A good synopsis of efforts led by data scientists in China to verify and augment government-published economic data. The proliferation of large, significant data sources from companies like Baidu, China Union Pay Co., Alibaba, and Didi Chuxing gives global investors a fresh look inside the world’s largest trading nation. The question is, will the government allow this effort to flourish? Read More

Even secretive hedge funds can open source their software

International Business Times

Cuemacro’s CEO Saeed Amen has been looking at alternative data since 2008 when he wrote a paper on using Google search data to trade currency. He explains why hedge funds should share their code (without divulging their alpha-generating strategies). Read More

Reuters built its own algorithm to verify breaking news on Twitter

NiemanLab

A TWEET IN CAPITAL LETTERS IS LESS LIKELY TO BE TRUE. This is one of Thomson Reuters’ findings from its Thomson News Tracer, which monitors and parses Twitter to identify legitimate breaking news. The tool uses data science for detection and verification of newsworthy events, and aims to give reporters a fighting chance at being “first,” or at least tying Twitter for first. Read More

Meet one of the data scouts for the hedge fund industry

International Business Times

We’re happy to hear that our friends at Neudata are growing their team. Neudata founder and CEO, Rado Lipuš explains how word-of-mouth still matters when it comes to surfacing little-known datasets for the sell and buy side firms that covet them. Read More

Data hoarding and alternative data in finance

RavenPack

Like Neudata (and Quandl), RavenPack is on the hunt for unique datasets to help institutional investors. Here they discuss types of alternative data that hold promise along with key challenges for mining them. Read More

The promise and challenge of big data for pharma

Harvard Business Review

Unstructured data, talent shortages, and a race to develop cutting edge analytics. The pharmaceutical industry is firmly in the data game and is now competing to attract the best data scientists. Pharmaceutical data is set to explode and will provide us all with a new set of bits to mine. Read More

The non-technical guide to machine learning & artificial intelligence

Medium

Sam DeBrule graciously and thoroughly consolidates most of the machine learning resources a non-technical person will ever need. From news sources, to startups, to people, to events – this list is worth a browser bar bookmark if you want to keep AI and machine learning on your radar. Read More

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