Data Science Platforms Help the Buy Side Integrate Alternative Data

By Ivy Schmerken, Editorial Director

Asset managers are looking for ways to mine alternative data sets for investment ideas, recognizing that stock pickers cannot rely on traditional research.

An explosion in alternative data, ranging from satellite images to mobile geolocation data and unstructured text, has created an arms race among hedge funds and quantitative funds. Many firms have hired data scientists to dive into pools of data and to use machine learning algorithms to extract insights or predictive signals. Traditional buy-side firms are also eyeing big data sets while wrestling with how to incorporate them into the investment process.

…For example, Predata, a predictive analytics company, identifies online shifts in human behavior and anticipates global events through machine learning and alternative data. “It turns metadata into insights,” said Hazem Dawani, CEO, adding that “metadata is language agnostic across the world whether it’s in English, Swahili or German.”…