Covid-19 has created an opportunity for alternative data to shine
As investors seek data to gauge the pandemic’s real-time impact on the economy and company profits, a new report finds more than half of global hedge funds were already using alternative data.
A report from the Alternative Investment Management Association (AIMA) and fund services and technology provider SS&C showed results from a survey of 100 global hedge fund managers late last year. The managers accounted for roughly US$720 billion in assets under management.
The report defined alternative data as information that comes from unconventional sources. It’s usually less structured than traditional data, requiring algorithms or computational power to sort and interpret the information.
These non-traditional sources include satellite imagery, social media trends and weather patterns. Alternative consumer spending data, for example, includes credit card receipts or footfall in shopping centres.
The report described how natural language processing helped measure consumer sentiment toward Versace in China — the key market for luxury goods growth.
When Versace launched a T-shirt last year implying Hong Kong and Macau were sovereign territories, alternative data was able to pick up on the negative sentiment before it was reflected in company earnings.
The coronavirus has led to a surge in demand for alternative data, the report said........MORE, including a link to the report.
