The Need for Alternative Data

Unifying Alternative Data

The Need for Alternative Data

Alternative data in the financial industry refers to non-financial data that impacts financial markets. This data is essential, as it gives insight into the potential price movements and behavior of financial instruments. Some examples of alternative data are crop health indexes, factory shipment counts, newspaper announcements, industry maps, product definitions and more.

Alternative data helps investment firms generate alpha and improves trading strategies. Analysts, whether fundamental or quantitative, use alternative data to feed their models and to analyze stock trends, to conclude what to invest in and how much to invest in it. Institutions that sell alternative data need to centralize and standardize the data, and make it usable for consumers. 

The challenge for both use cases is that there’s a lot of alternative data providers with varied and overlapping data. The sheer amount of alternative data out there makes it extremely difficult to manage and organize. How is it possible to get the data from different sources into the system? How can the alternative data be standardized for consumption? These are challenges in which TickSmith has both the experience and technology to overcome.

For Analytics & Hedge Funds

The GOLD Platform ingests alternative and traditional data used to feed analytics and models. Clients have the ability to mix this content with their own data. “We have the solution to centralize alternative data and make it A.I. available. We are an A.I. enabler,” says Marc-André Hetu, CPO at TickSmith. “The GOLD Platform ingests data—any data— from alternative sources and other verticals, and makes it so that analytic processes can be accurately applied to it.”

An example of using alternative data for analytics, is of an alternative data provider that provides camera footage on the Winnebago factory. This data provider simply counts the number of finished vehicles coming out of the factory. The data can be used to analyze the number of outputs in relation to the stock tickers of other competing companies. A correlation can then be formed to predict the relative price of Winnebago’s stock, based on the company’s actual output.

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TickSmith’s GOLD Platform:

  • Securely processes thousands of data sets
  • From complex financial data to alternative content
  • Productizes data flows from files and real-time feeds
  • Automates management, enrichment & delivery
  • Enables Petabytes of data

Supported methods of data ingestion and delivery:

  • Push and Pull
  • APIs
  • SFTP
  • S3 to S3

Data complexity resolved by the platform:

  • Different data types
  • Different data sources
  • Different encryption

The GOLD Platform ingests alternative and traditional data used to feed analytics and models. Clients have the ability to mix this content with their own data. “We have the solution to centralize alternative data and make it A.I. available. We are an A.I. enabler,” says Marc-André Hetu, CPO at TickSmith. “The GOLD Platform ingests data—any data— from alternative sources and other verticals, and makes it so that analytic processes can be accurately applied to it.”

An example of using alternative data for analytics, is of an alternative data provider that provides camera footage on the Winnebago factory. This data provider simply counts the number of finished vehicles coming out of the factory. The data can be used to analyze the number of outputs in relation to the stock tickers of other competing companies. A correlation can then be formed to predict the relative price of Winnebago’s stock, based on the company’s actual output.

With TickSmith’s technology, we can bring firms to a whole new level by providing them with a ready-to-go, online data store that they can fully customize, at a consumable price point.
Samantha Campbell
Alqami CEO

Unifying Alternative Data

TickSmith’s GOLD Platform uses a powerful ETL to normalize alternative data. It reads the incoming input data format and is able to change the behavior. For example, this flexible and configurable ETL can transform the format of the data and rearranges it to match data products being sold on an online web store.  Once in the system, the data is then categorized and organized to be easily accessible. The end-user is able to hit the same API end-point with the same parameters, and get the data they’re searching for, no matter which vendor it’s coming from.

Using a module called Granular Data Catalog, the GOLD Platform creates a catalog entry per data set, which indicates the data provider, type of data, how it’s ingested, and how it goes out of the system. The module allows for metadata to be attached to the data product, which separates the data conceptually for different users. The combined deployment of ETLs, APIs and modules on the GOLD Platform enables alternative data suppliers to efficiently normalize their data for distribution. 

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