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I disagree. Sell-side research using so-called alternative data is a different skillset from trading and buy-side research. Some datasets comprise sufficient al
by fractionalhare 6y ago
I disagree. Sell-side research using so-called alternative data is a different skillset from trading and buy-side research. Some datasets comprise sufficient alpha in of themselves to trade on, some datasets have some edge (i.e. are not yet priced in) but require more sophisticated analysis. Good data is necessary but insufficient for developing viable trading strategies.
Source: Also used to work in this space. Still do, but not on the sell-side anymore. I wouldn't give trading capital to someone if their entire pitch was just possession of exclusive, useful data.
- logicslave 6y agoI used to work in buy side research. Most of the good datasets have already been stripped of alpha, but are bought and sold anyways because funds have to know what the data is saying to keep up with the other funds. A true new dataset with separate alpha is a goldmine. There are ones that add to the edge, and require quants, but in my experience all the valuable alternative data can be normalized and then back tested to the stock price. If you cant do that with it, its not that valuable outside a few hedge funds.