A definition of the Alternative data, or what we have missed?

A new approach to mining and sourcing the data with AI algorithms and ML could define a winning strategy. The question is: How to navigate through the ocean of disinformation and viral leaks? What is the core of the solution, which will help us to shape the future?

With all this in mind, let's step back and look into the alternative data.

What is it? Any idea?

According to Wikipedia: "Alternative data refers to data used to obtain insight into the investment process. These data sets are often used by hedge fund managers and other institutional investment professionals within an investment company."

What makes the whole game more interesting is the way of how the alternative data could be used in investment predictions or successful projecting. Any investment decisions should be made with the use of core foundation and AI& ML algorithms when the system co integrated in each other and learn by itself. The data sets of parameters of historical quantitative and qualitative "Big Data" allow predicting the possible outcome or a model. With the meteoric development of ANN its starts to be possible with only one question mark, How the AI will alternate the data points? To answer this - let's have a look at "Big Data"

How we can define it?

According to Laurent Laloux, Chief Product Officer, Capital Fund Management (CFM) Source II. Many people think big data is simply a huge data set, but the term is a misnomer. It’s more complex than sheer volume – big data is a continually evolving concept. At any point in time, a specific data set is “big” if it’s at the limit of what technology can do with it. Twenty years ago, analyzing tick-by-tick data from exchanges was big data because that was what the most advanced technology was capable of handling. Today, any modern computer system, whether in-house or cloud-based, can efficiently deal with that type of data. So, even if the data set is huge in terms of size, it’s not big data if it’s not challenging the technology. The concept of big data has moved in concert over time with innovations in technology.

So where is the magic?

The straight answer is how we could successfully identify the "alternative data", which only could be just an assumption, but not an indicator or a trend, where the industry or economy is going, or will be at a certain time. You need to take into account, that "alternative data" is not a direct parameter, but a trend, for example, a viral increase of credit card spend, booming cargo transportation or shipment, development of a new mine or a new tech.

The magic is in a Quant prediction and a new approach, that interconnects many aspects, that were hidden, or by technology was not doable or even not possible.

According to Cambridge Dictionary Quant is someone in the financial industry who uses mathematical methods, for example to measure the risk of an investment

Nowadays mostly all of the ANN models are backed up by a mathematical approach, but with ML some of them already beating the human approach in thinking, but most importantly they are ready to surpass it in the future.

So what is next?

Considering all the above we could say, that the modern ANN, AI, and ML with Quant modeling is the future of any investment company to successfully identify the patterns and trends, based on historical quantitative and qualitative data points and alternative indicators.

Let us know your thoughts.