Has any of you ACTUALLY made more money from so called alternative data?

Discussion in 'Data Sets and Feeds' started by alphatrion, Mar 5, 2019.

Do you use any so called alternative data?

Poll closed Apr 5, 2019.
  1. Never heard of them

    5 vote(s)
    50.0%
  2. Yes, a lot

    3 vote(s)
    30.0%
  3. I am interested, but haven't used any

    1 vote(s)
    10.0%
  4. No and don't think they matter

    1 vote(s)
    10.0%
  1. Guys, I heard a lot of buzzes about the next alpha source being from alternative data such as auto insurance data, weathers, business health metrics and geopolitical events.

    Are any of you actively using these data to gain an edge over others? If so, how?

    I am trying to collect some event data such as product launches, weather, military actions and actions done by important figures in our society. Then I will run them against some asset classes to find some significant correlations. Is it worth doing?

    I'd really appreciate your input on this.
     
  2. Handle123

    Handle123

    In the past I have formed calculations of inputs of non tradeable data to form "trend", let's face it, if you have incredible reliable definition of trend, you have gold. But comes down to insane number of data and just easier to become very good at chart reading. There are a few non tradable inputs I watch for overall "feel" for major reversals for stock market, and they are over looked by the masses often, but building a trading model on them is often late, they only give indications of possibilities whereas charting is right now what is happening. Chart reading and hedging are my edges, plus confidence in what you are doing.

    I think all of that in fine if you have huge hedge fund, but if you trying to buy insurance stocks, as soon as announcement of earth tumors or hurricane, too late to sell short insurance stocks.

    I think for overall economy data can give good clues whether to start various businesses, like if expecting down turn in economy, would go with starting used cars lot instead of new cars.

    Nothing better though than taking few years and really study charting.
     
    apdxyk, murray t turtle and Nobert like this.
  3. Getting your hands on a unique dataset is 100% worth doing. You might not find alpha in your first dataset but as you become better at collecting and processing data, eventually you will find something.
     
  4. Nobert

    Nobert

    Are you profitable , when correlation is not included in your analysis ?
     
  5. We look at option data when we think it's part of a Delta Neutral trade or when it's the layoff from structured notes. Especially in Europe where the note business can really distort a market.
     
  6. I haven't initiated yet. I think the theory is sound that if you can find linkages between certain events such as rain falls in some areas in Brazil and certain commodity prices, it will at least give you some trading ideas.
     
    Nobert likes this.
  7. So you are saying that even if you have those data, you still can't trade fast enough to benefit?
     
  8. sle

    sle

    Yup. There are some very interesting datasets out there that definitely have alpha, mostly by commercial vendors but some are free.
     
  9. Handle123

    Handle123

    I simple don't have faith in honesty of data reported, but it does help in longer term models. Automation does trade all the reports from around the world, but does not take what is in the report to be of value, but how others read into the reports that form chart patterns.
     
  10. %%
    Any could benefit from insurance data, they' re good @ risk. War tends to be bullish=if exchange is open, if they close it, exspect a gap up.If 95% geo events make no difference to main trend + press says they do , I ignore most nes like the market maker says''have better things to look on...............................................................................................
    IF I did a lot of retail I would pay more attention to cars in parking lots; I don't ,so I don't........................................:cool::cool:
     
    #10     Mar 6, 2019