Alternative data has become popular nowadays and more companies are investing in it. How does it differ from the traditional data sets and who are some leading players in the alternative data industry?
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Alternative data has become popular nowadays and more companies are investing in it. How does it differ from the traditional data sets and who are some leading players in the alternative data industry?
Alternative data refers to secondary information which is utilised to get timely insight by investment companies. Alternative data comes from other than the primary source.
For instance, an investor wants to buy shares of a company X. However, company X, quarterly data has not yet been published. Therefore, the investor would explore other sources to get to know the recent developments in company X. The other sources can be from Twitter, latest images, website traffic etc., depending on the company X nature of business.
Alternative data is in the form of big data and can be very complex and large. It would require AI or special software to analyse and get intuitions.
Microsoft Excel would not be an ideal solution to handle such data. Some, of the data, can be collected through financial transactions, IoT, sensors, mobile devices, satellites etc.
Alternative data can be collected through various ways such as web scraping, API, which would come in a very complicated form. Even some data would be non-numeric.
According to AlternativeData, the following are leading companies operating in various sectors.
Automotive
China
Consumer
Energy
Internet
Transportation
Travel
The data can be collected in different forms and impossible for Excel to handle.