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.

May 2019

Alternative data provides measurable and sustainable investing edge

Greenwich Associates

Alternative data has been around for at least a decade, but increased adoption has made it less “alternative” and a more essential part of portfolio construction. The latest Greenwich Associates survey reviews alt-data trends. Read More

Long-only investors increasingly look to alternative data

Profit & Loss

Among the findings of the above-mentioned Greenwich Associates survey, traditional long-only investors say they are joining quantitative early-adopters in using alternative data to achieve alpha. Read More


Human factor is crucial to the alt-data gold rush

Waters Technology (subscription)

While technology advancements are being made, buy-side firms still rely on humans to make sense of alt data. Read More

Computer models won’t beat stock market any time soon

Bloomberg Businessweek

We expect a lot from machines: Spotify picks your songs, your phone recognizes your face and self-driving cars may be just around the corner. Yet, there’s something you’ll likely never have access to: a computerized stockpicker that outsmarts the market. Read More

Stick to core skills or risk data overload, says Goldman quant

Risk.net (subscription)

Explosive growth in alt data, machine learning, and cheaper computing promise to help generate alpha. But asset managers must get picky about how they handle new types of data or they risk being overwhelmed, says a quant tasked with selling Goldman’s internal data. Read More

Buyside, FISD, begin industry push for alt data standards

Waters Technology

In response to firms struggling with the data science aspects of integrating alternative data, some industry participants and the Financial Services Information Association (FISD) are pursuing new initiatives to make it more accessible. Read More

Show me the data: investors demand better ESG disclosure

Opalesque (subscription)

The value of environmental, social and governance (ESG) data is well understood, but for it to be useful, it must be specific, reliable and consistently provided. For the most part, disclosure has been limited and voluntary. Read More

Nextgov

Lawmakers propose $2.2 billion to advance AI

A bipartisan trio of senators want to pour billions of dollars into expanding the use of artificial intelligence across government and industry, and preparing the country’s workforce to use the tech. Read More

Bloomberg (subscription)

Analysts make research cooler, wonkier and bespoke to lure cash

As the industry wrestles with MiFID II, asset managers are trying to win clients through podcasts, novella-length thematic analyses, and proprietary data. Three topics are particularly hot: ESG, renewable energy, and alternative data. Read More

Quants must think like amateurs in world’s wildest market

Bloomberg (subscription)

Mom-and-pop investors drive more than 80% of mainland China equity trades, so it’s important to understand what drives such ‘amateur’ investors. In this article, quants share how they use social sentiment and other alternative data to gauge the market’s direction. Read More

How has machine learning changed the game for Goldman?

Quantminds

ML has changed Goldman Sachs’ advertising material, but not much else, says Michael Steliaros, Global Head of Quantitative Execution Services (though eFinancialCareers thinks he may be trying to talk down job applicant expectations). Nevertheless, in this video the firm’s top quant remains measuredly optimistic, noting that his team can carry out calculations that were impossible “even two or three years ago.” Watch Here

Alternative data firms attract M&A, private equity, interest

Forbes

Companies that specialize in making and distributing unique datasets have attracted strong equity investment and M&A interest from strategic and private-equity investors. Mergermarket looks at potential deals and tie-ups. Read More

The AI sharecroppers

Axios

Without humans, AI can’t tell between a skyscraper from a spider. To give algorithms power, an invisible underclass of low-wage workers are painstakingly making inventories of millions of pieces of data. Read More

Alternative data in fixed income, real estate, FX, and crypto

Various

When looking at investors’ use of alt data and technology we often focus on equities, but several articles this week looked at applications in other areas: Institutional Investor asks if ML will replace active bond managersEstates Gazette notes useful alternative datasets for commercial real estate, Cuemarco looks at alternative datasets for forex, and Bloomberg takes an alt-data dive into Bitcoin.

Learning to love the AI bubble

Sloan MIT Management Review

Are we in an AI bubble? How bad would it be if it were to burst? Boston Consulting Group says if there is a bubble it has more in common with the dot.com bubble, which helped finance the internet backbone, rather than the housing bubble behind the 2008 meltdown. Read More

Peering into peer selection: quantifying company similarity

MSCI

Is it possible to identify and measure relationships between companies from a systematic analysis of various types of data, including fundamentals and company filings? This MSCI paper looks at whether alternative data can be used to get a better understanding of inter-company relationships and risks. Read More

Quartz

Data show Game of Thrones is taking a historic critical nosedive

Examining IMDb data on 82 television shows that lasted at least five seasons, Quartz found that the show’s nosedive is nearly unmatched, with only one other former critical darling having a sharper drop. Read More

BlackRock ramps up research on AI, automated trading, alternative data

Pulse 2.0

BlackRock founded AI Labs last year to accelerate tech innovation. It’s since expanded to a staff of 30, about a third of whom are PhDs, working on projects such as an automated bidding engine for securities and further alternative data use. Read More

UK starts using alternative data for official CPI

Press release

The UK’s Office for National Statistics will start using alternative data to calculate inflation. The ONS said it will include point-of-sale scanner data as well as scraped prices from retailers’ websites to produce more timely and granular inflation statistics. Read More

Economists create own benchmarks to counter India’s dubious data

Reuters

Economists covering India are starting to use alternative data sources due to their low confidence in official numbers. Among the datasets they prefer are indicators like car sales, air and rail cargo levels, and proprietary indices to track the economy. Read More

Is the $2B reference data market set for a shake-up?

Forbes

With data being said to be akin to the “new oil” and one of the world’s most valuable resources, could a challenger and disruptive data provider be poised to disrupt the $2 billion reference data industry? Read More

AQR publishes framework for an ESG strategy

Institutional Investor

Though hedge funds lag their asset management counterparts in developing ESG investments, AQR leads the pack by releasing a framework on responsible investing in partnership with the United Nations Principles for Responsible Investment. Read More

Hedge funds excited about machine learning, but do clients understand it?

Business Insider (subscription)

Now that machine learning has become a buzzword, investors are putting their money into funds and businesses claiming machine-learning expertise. Unfortunately, amid a frothy market there is often no way to confirm such expertise.  Read More

The answer to Uber’s profit challenge may lie in its trove of data

Reuters

Uber has never made a profit and burns through cash at a prodigious rate. Yet it has high-value data on who uses it, how they use it, and where they go. All of this data, a source says, can become a source of revenue.  Read More

Better data increases appeal of emerging markets

Institutional Investor

Pension funds, endowments, and other large institutional investors are turning to emerging markets in search of returns, as the increasing availability of alternative data and ESG research are compensating for a historical lack of quality information. Read More

Funds hunt for the real McCoy in alt-data jungle

Risk.net (subscription)

It’s difficult to find out something genuinely new about a company by poring over social media, data from mobile apps, and other unorthodox information. But it’s not impossible. Four funds give a rare insight into their approaches. Read More

Asset managers accelerating use of alt data and advanced analytics

Bloomberg (subscription)

Investment firms are getting different results from alternative data depending on how far along they are in adoption. As might be expected, advanced adopters are generating sustainable value while new ones still need to invest heavily to build an analytics foundation. Read More

Exchanges step up competition for tech and data dominance

FT and Waters Tech (subscription)

The heads of the biggest US exchanges this week talked about how technology is at the centre of growth strategies. Speaking to the Financial Times, Nasdaq CEO Adena Friedman talked about plans to build a data and technology juggernaut (including through the acquisition of Quandl). Meanwhile, NYSE CEO Stacey Cunningham spoke to Waters Technology about how tech is seen as central to the board’s evolution.

Is news sentiment still adding alpha?

Seeking Alpha 

It’s nearly impossible to go to a quant conference without being bombarded with flyers from data vendors and panel discussions on news sentiment. But is there real value? This author made an effort to extract value, with indifferent results. Alpha decay seems a likely culprit. Read More

Satellite data sheds new light on North Korea’s opaque economy

The Economist (subscription)

North Korea may have the worst economic data of any country. But it does emit a bit of light, which orbiting satellites detect, making geo-data one of the only reliable sources of economic information. Read More

How big data can inform investment decisions

Knowledge@Wharton (subscription)

In this podcast, Wharton professor Christina Zhu talks about her research on how investment managers interact with alternative data and how actions by a few investors with exclusive information can impact the behavior of less-informed market participants. Listen Here

AI is a greater threat to human existence than climate change

Business Insider (subscription)

Climate change is unlikely to bring about a good outcome, but if AI’s development turns out badly, it’ll be far worse than climate change. An Oxford philosopher followed by Bill Gates and Elon Musk says AI could be great for humanity, but it could also turn out really, really, badly.  Read More

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