Alternative Market Data and Alpha

Alternative Market Data and Alpha

2018 is the time to put forth our trends and predication for the coming year. With our mission at Relate The News to transform unstructured data into actionable insight for the capital markets our focus for 2018 trends will be on alternative market data and resulting trends in driving alpha.

Unstructured data elevates action – The first trend prediction of 2018 is that the need for actionable structured data will accelerate as a requirement for generating alpha in the capital markets. The key to insightful and actionable structured data is the transformation of unstructured data into these actionable insights. We have been putting a great look at this new trend, by studying the importance of structured data and the necessity of that data to be actionable in their resolutions for alternative investment firms.

AI remains on early stage – This is a bold prediction for 2018. Much attention and effort will be applied in 2018 to use AI to improve investment decision making from trading to risk management. For 2018 much of this effort will be undertaken due to mindshare given to AI by the broader media as well the consumer product driven uses of AI rather than financial markets. There will be results; however, by year end there will remain a significant gap between the promise of AI and the returns based results of AI.

Alternative market data acquisition key to Alpha – Investment firms already utilizing alternative market data from satellite images, online receipts and sentiment data will continue their hunt for insightful and actionable data to give them an edge in generating returns. In 2018 traditional firms will begin to embrace these alternative market data sources to aid in portfolio selection, trade timing and risk management.