Alternative Data and Artificial Intelligence to enhance investment decisions.
Alternative Data are non-traditional, big and often unstructured data coming from digital environments (i.e. blogs, forums, social or e-commerce platforms, maps, etc.).
Collecting, selecting, interpreting and weighing the Alternative Data implies an algorithmic approach to digital information (i.e. to convert texts into numbers) and consequently specific skills, unique expertise and cutting-edge technology.
Alternative Data can be used in financial decision-making processes, alongside traditional financial statements, quarterly reports or indicators such as Prices and Volumes. Artificial Intelligence opens up the possibility to gather essential information from several different sources and allows an integration within a cohesive application.
This means that the most critical investment decisions, or even certain actions/reactions in relation to a specific financial asset, might be taken with a sounder basis – hence, forming a competitive edge of updated and exclusive knowledge and strategic risk-forecasting.
Over 90% of the world’s current dataset has been produced in the past two years – of which only 0.5% has been subject to some form of analysis.
Alternative Data makes it feasible to track not only those signals which already have significant financial impact (main signals), but also weak or emerging signals, with a bottom-up approach. The latter – if properly analyzed and weighed – provide valuable insights concerning developing financial trends not yet fully explicit, albeit with the right premises.
These signals are concealed under the presence of other data with a higher visibility, therefore hard to uncover without an appropriate software specifically designed to eliminate background noise (and fake news).
Artificial Intelligence to support investment decisions.
There is a huge opportunity to seize by analyzing and weighing data before it turns into publicly available news.