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A-Team Insight White Papers

Adding Context to Alternative Data

The investment management community’s embrace of alternative data has created a tsunami of new data sets that are packaged by specialists to offer unique insight into very specific industry segments and business activities.

But as valuable as this data is, it has its limitations: alternative data can tell us what’s happening now, based on recent events and historical trends. But it can’t tell us what’s going to happen, and relying on past performance as an indicator of what’s to come is fraught with danger.

This discussion document – Deriving Alpha from Nowcasts and Forecasts – describes the pitfalls involved in relying too heavily on new alternative data services that supposedly hold the promise of guaranteed investment returns. It looks at how asset managers can add context to alternative data in order to gain true insight into the factors that really affect future performance.

The use of alternative data is evolving. This paper examines how it can be used more effectively as a complement to more traditional intelligence sources, such as earnings forecasts and a more in-depth analysis of corporate performance by analysts.

Read this white paper to better understand the uses that alternative data should be put to, and how alt data can be best incorporated into investment analysis.

Download the whitepaper to find out more about:

  • In what ways is alternative data useful for investment managers?
  • What kinds of insight does alt data not provide?
  • What is the relationship between forecasting and alt data?