Why has been alternative data recently so much popular? The answer most of the time hovers around the notion of “seeking the new alpha sources”. First, the hunt for alpha is huge due to the low yield world and is getting only bigger. Secondly, some of the more popular strategies can become crowded, leading to diminishing alpha or the risk of a sudden reversal in performance (all of us remember this year’s growth vs. value switch).
We at Quantpedia don’t create nor manage any alternative data sets. But we are aware of this trend, and we strive hard to find new alpha opportunities which may lie in these new data sources. From the database of almost 700 quantitative investment strategies Quantpedia has gathered, almost 100 strategies are based on alternative datasets. Today, we picked just 6 of them to give you a little taste of how these alternative strategies may look like, what kind of datasets they utilize and how they perform.