Alternative Data News. 11, December 2019

The AltDataNewsletter by CloudQuant

Finding sources and uses for alternative data can be difficult. At CloudQuant we regularly read and search the internet for new sources of data that can be used in our mission to find alpha signals and build quantitative trading strategies. We recognize that we are technology and data junkies so we wrote our own crawler that specifically seeks out web pages, posts, and news articles that give us a snapshot of what is going on in the world of Alt Data. The following is a collection of articles that we think you will find interesting from the past week.


HNW Wants More ESG in Portfolios

The notion of applying environmental, social, and governance (ESG) criteria to the investment process is increasingly gaining momentum among high-net-worth (HNW) investors. Cerulli Associates’ latest report, U.S. High-Net-Worth and Ultra-High-Net-Worth Markets 2019: Multigenerational Shifts in Wealth, finds that as much as 58% of HNW practices currently use ESG/socially responsible investing (SRI) and plan to further increase their allocations in the next 12 months.

“The concept behind ESG resonates with HNW investors due to their comfort levels in investing in innovative areas that provide impact and because of their deliberate focus on sustaining and protecting their wealth,” states Asher Cheses, a research analyst at Cerulli. Among those leading the movement toward ESG investing are multi-family offices (MFOs), many of which are set up to help families pass down their wealth across multiple generations. “For many family offices, sustainable investing has become a core component of their investment process that unites family members around common values and beliefs,” adds Cheses. While many HNW practices started out with negative/exclusionary screening (e.g., tobacco, weapons), they have since evolved to offer a wider range of strategies to their clients, including ESG integration and impact investing.

2019-12-11 01:28:08+00:00 Read the full story…
Weighted Interest Score: 2.7376, Raw Interest Score: 1.5331,
Positive Sentiment: 0.1971, Negative Sentiment 0.2628

Euro Investors Want More ESG Funds

That’s the findings of Cerulli Associates’ latest report, European Environmental, Social, and Governance Investing 2019: Setting Standards and Enhancing Integration, which shows the extent to which responsible investment (RI) is growing in Europe.

In recent years, managers have been launching new value propositions in the environmental, social and governance (ESG) domain to meet increasing demand from local investors. Cerulli’s research shows that by the end of August 2019, 1,840 ESG mutual funds and exchange-traded funds (ETFs) were registered for sale in Europe and that 233 new ESG funds were launched in the region during 2018.

Although the pace of growth of ESG assets varies across Europe, demand for RI products is increasing throughout the region. This is particularly true in the wealth management channel, where private banks are registering the highest level of demand for ESG mutual funds and ETFs from their clients. Overall, ESG integration funds account for the highest level of ESG assets in Europe. They stood at €303.0 billion (US$355.9 billion) at the end of August 2019, having registered net new flows of €10.4 billion in 2018 and €26.6 billion by the end of August 2019.

2019-12-11 02:37:20+00:00 Read the full story…
Weighted Interest Score: 2.6973, Raw Interest Score: 1.5948,
Positive Sentiment: 0.1744, Negative Sentiment 0.0498

Climate change has made ESG a force in investing

“Labelling based on incomplete information, public shaming, and shunning wrapped in moral rhetoric,” said Hester Peirce, a straight-talking commissioner at America’s main financial regulator, the Securities and Exchange Commission, in June. She was taking aim at the scoring systems that purport to assess firms’ performance based on environmental, social and governance (esg) factors. Yet love them or hate them, esg scores are becoming ever more important in the world of investing and capital markets. At least $3trn of institutional assets now track esg scores, and the share is rising quickly.

In America and Europe some politicians, bosses and investors want to shift away from measuring corporate performance based mainly on shareholder returns. Climate change is another catalyst. Christine Lagarde, the new head of the European Central Bank, thinks the institution should consider using monetary policy and bank supervision to fight climate change—a shift that would involve assessing which firms are dirtier than others. Mark Carney, the governor of the Bank of England, has championed better disclosures by firms on climate change. Chris Hohn, the head of tci, a London-based hedge fund famous for its hard-headed approach, has outlined plans to vote against the directors of companies that fail to reveal their carbon emissions.

2019-12-05 00:00:00 Read the full story…
Weighted Interest Score: 2.1841, Raw Interest Score: 1.1297,
Positive Sentiment: 0.2071, Negative Sentiment 0.2448

CloudQuant Thoughts  : ESG ESG ESG – When the wealth managers increase their interest in a segment, so should you. CloudQuant has long been aware of the potential value of ESG and this was a driver in the decision to make the first Alternative Data Set that we offer be an ESG data set. Head over to our data catalog for information.

Alternative data blew up thanks to desperate hedge funds looking to get an edge. Next year, the booming space could attract more mainstream investors.

The constantly changing alternative data space is set for more growth in 2020, according to one data platform, but the datasets, structure, and clients will be different.

After primarily selling to hedge funds looking for any edge to beat the market, alternative data platform Adaptive Management thinks that corporations and private equity will jump into the space in 2020.

More clients will likely choose to receive unstructured data feeds so the…

2019-12-05 00:00:00 Read the full story (Business Investor Prime Membership Required)…
Weighted Interest Score: 5.4514, Raw Interest Score: 2.1891,
Positive Sentiment: 0.1443, Negative Sentiment 0.1443

CloudQuant Thoughts : “Table Stakes” is a term I am hearing thrown around a lot recently, “Utilizing Alternative Data is like having a Bloomberg Terminal, it is not a competitive advantage anymore, just a necessity for doing business”. Such is the increase in demand and rapidity of Alpha extraction that many firms are requesting new to the market data sets be delivered raw and fast.

Big Data: Using it to fight credit card fraud

The issue of credit card fraud has become an increasingly pressing topic in recent years. With fraudulent transaction values going into the billions, many credit card companies are scrambling to find a solution to the problem of credit card fraud once and for all.

Many credit card companies have turned to big data in hopes of finding a solution to credit card fraud. Big data is being used by many to tackle this problem because big data has the capacity to handle the data necessary to make a noticeable dent in the prevalence of credit card fraud.

2019-12-11 09:35:33+00:00 Read the full story…
Weighted Interest Score: 3.4384, Raw Interest Score: 1.1971,
Positive Sentiment: 0.2866, Negative Sentiment 0.5564

CloudQuant Thoughts : I have been a victim of credit card fraud on a number of occasions recently through no fault of my own, maybe they are attracted to my ridiculously high limit! I was astonished that they allowed large transactions from odd locations well outside my local area and my normal buying habits. I never shop at Walmart, not outside my own town much and I certainly do not by three flatscreen TVs at once.. WHO DOES? I predict that the the application of ML to detect bogus anomalous transactions will cut them dramatically!

EDI Worldwide Corporate Actions and Securities Reference Data services now available in AWS Data Exchange.

Exchange Data International’s (EDI) Worldwide Corporate Actions (WCA) data and Security Reference Data (SRF) services are now available for purchase in AWS Data Exchange.

AWS Data Exchange is a new service that allows Amazon Web Services (AWS) customers to securely find, subscribe to, and use third-party data in the cloud. This allows potential retail customers access to EDI’s high quality reference data and corporate actions data via the cloud to help identify events that may impact their investment strategy for global equities.

2019-12-11 00:00:00 Read the full story…
Weighted Interest Score: 3.2000, Raw Interest Score: 2.3522,
Positive Sentiment: 0.1344, Negative Sentiment 0.0000

CloudQuant Thoughts : More and more Data Vendors and Data Vendors’ representatives are making their data-sets available on the new AWS Data Exchange. Amazon are looking to corner another profitable market with their massive worldwide AWS system. I for one welcome Jeff Bezos as our overlord.

The 4 Hottest Trends in Data Science for 2020

The field of Data Science is growing with new capabilities and reach into every industry. With digital transformations occurring in organizations around the world, 2019 included trends of more companies leveraging more data to make better decisions. Check out these next trends in Data Science expected to take off in 2020.

  1. Automated Data Science
  2. Data Privacy and Security
  3. Super-sized Data Science in the Cloud
  4. Natural Language Processing

2019-12-04 00:00:00 Read the full story…
Weighted Interest Score: 3.2009, Raw Interest Score: 1.9054,
Positive Sentiment: 0.2347, Negative Sentiment 0.1032

What Machine Learning Will Mean for Asset Managers

The tools of machine learning may offer active fund management firms many opportunities to outperform competitors and market indices, but the investments required in data analytics will be significant and the competitive advantage obtained many not be sustainable in the long term.

Some industry experts argue that machine learning (ML) will reverse an increasing trend toward passive investment funds. But although ML offers new tools that could help active investors outperform the indexes, it is unclear whether it will deliver a sustainable…
2019-12-03 13:25:38+00:00 Read the full story…
Weighted Interest Score: 3.7030, Raw Interest Score: 1.9074,
Positive Sentiment: 0.3105, Negative Sentiment 0.2661

State Insurance Regulators Post AI Principles Draft

If artificial intelligence (AI) systems are going to have anything to do with insurance, they ought to obey the same rules that the flesh-and-blood players follow. A team of state insurance regulators at the National Association of Insurance Commissioners (NAIC) has put that goal in a new AI regulatory principles draft.

The NAIC’s new Artificial Intelligence Working Group has posted the draft on its section of the NAIC’s website. Comments are due Jan. 17. Working group members agreed to seek comments on the draft Saturday, during an in-person session at the NAIC’s fall national meeting in Austin, Texas.

The group is part of the NAIC’s top-level Executive Committee. The committee formed the working group to “study the development of artificial intelligence, its use in the insurance sector, and its impact on consumer protection and privacy, marketplace dynamics, and the state-based insurance regulatory framework.” Some consumer reps and others have argued that, in some cases, poorly designed financial services AI systems, or systems drawing on poor data sources, might lead to illegally arbitrary or discriminatory business decisions, or decisions based on reasoning that’s locked away in an AI system and not available for review by live humans.

2019-12-09 00:00:00 Read the full story…
Weighted Interest Score: 3.0235, Raw Interest Score: 1.1912,
Positive Sentiment: 0.0644, Negative Sentiment 0.1932

Bitcoin Declines In November As Chinese Euphoria Fades

Bitcoin prices fell in November, pushing lower as the cryptocurrency grappled with continued … [+] challenges. (Photo Illustration by Chesnot/Getty Images) Getty Images

Bitcoin suffered some notable losses last month, following a downward trend as it experienced lackluster trading volume and negative sentiment.

The world’s most prominent digital currency endured these declines after enjoying sharp gains the month before, surging nearly 40% in…
2019-12-09 00:00:00 Read the full story…
Weighted Interest Score: 3.0031, Raw Interest Score: 1.5417,
Positive Sentiment: 0.1804, Negative Sentiment 0.3772

The Artificially Intelligent Investor: AI And The Future Of Stock Picking

A computer can recognize a cat. Can it spot a bargain stock? Sitting in a business school lecture on hedge funds four years ago, Chidananda Khatua got the inspiration to answer this question. A veteran Intel engineer working on a nights-and-weekends M.B.A. at UC Berkeley, Khatua imagined that something powerful might come out of the ability to blend precise financial data with the fuzzier information to be found in annual reports and news articles.

For most of their history on Wall Street, computers have been strictly quantitative—dividing, say, prices by earnings and ranking the results. But that is destined to change. A dramatic demonstration of silicon’s verbal potential came in 2011, when an IBM system called Watson bested two human champions at Jeopardy! To accomplish this feat the computer had to grasp not just numbers but genealogical relationships, time, proximity, causality, taxonomy and a lot of other connections.

Two years ago EquBot opened up AI Powered Equity ETF, with a portfolio updated daily on instruction from computers. In 2018 it added AI Powered International Equity. Chief Executive Khatua presides over a tiny staff in San Francisco and 17 programmers and statisticians in Bangalore, India. The system swallows 1.3 million texts a day: news, blogs, social media, SEC filings. IBM’s Watson system digests the language, picking up facts to feed into a knowledge graph of a million nodes.

Each of those dots to be connected could be a company (one of 15,000), a keyword (like “FDA”) or an economic factor (like the price of oil). There are a trillion potential arrows to link them. After trial and error inside a neural network, which mimics the neuronal connections in a brain, the computer weights the few arrows that matter. Thus does the system grope its way toward knowing which ripples in input data are felt a week, a month or a year later, in stock prices.

2019-12-09 00:00:00 Read the full story…
Weighted Interest Score: 2.8463, Raw Interest Score: 1.4605,
Positive Sentiment: 0.1897, Negative Sentiment 0.1707

10 Best Quotes From Machine Learning Developer Summit 2019

The biggest developers summit in India is around the corner as MLDS 2020 prepares to host the developer community across India in two cities in its second edition. Scheduled to be held on January 22-23, 2020 at Bengaluru and January 30-32, 2020 at Hyderabad, MLDS is expecting to host more than 1500 machine learning developers across four days. While the second edition of MLDS is just a month away, we bring some of the best quotes from the who’s who of the machine learning community from MLDS 2019. It was a huge success and saw a registration from more than 1000 developers, making it one of the most successful events in the industry.
2019-12-11 07:07:51+00:00 Read the full story…
Weighted Interest Score: 2.8349, Raw Interest Score: 1.2280,
Positive Sentiment: 0.2489, Negative Sentiment 0.1162

Lessons from a Year in the Data Science Trenches

Even after you explain how the computer arrived at a decision, the recommendation may be ignored because people are not entirely rational. When presented with an objectively better choice, people may choose another option for all sorts of reasons: habit, lack of trust, familiarity, misinformation.

Consider the scenic route choice: sometimes, people, for seemingly no logical reason, will take a significantly longer route between two places. Why? …
2019-12-09 21:19:35.283000+00:00 Read the full story…
Weighted Interest Score: 2.4784, Raw Interest Score: 1.3061,
Positive Sentiment: 0.2890, Negative Sentiment 0.2248

THE CHANGING C-SUITE: What the rise of information, data, and tech chiefs says about the future of leadership in America’s top companies

Technology leaders within organizations are increasingly tasked with overseeing sweeping digital overhauls. That is giving chief data, information, and technology officers new authority in the C-suite.

Business Insider is delving into the trend and uncovering how tech chiefs are navigating the evolving requirements of the roles.

These reports can also give C-suites information on how best to structure the executive team and advice for all leade…
2019-12-10 00:00:00 Read the full story…
Weighted Interest Score: 2.4613, Raw Interest Score: 1.4205,
Positive Sentiment: 0.2525, Negative Sentiment 0.2525

Stitch Fix’s Rally Is Worth Keeping in Mind as Elastic Trades Near Post-IPO Lows

Sometimes, a smaller tech company’s fight against Amazon.com (AMZN) ends up being far from a winner-takes-all affair.

And in the event that a smaller tech firm’s stock gets priced in a way that implies Amazon will do more damage than it’s likely to, this can create a buying opportunity.

Stitch Fix (SFIX) , whose shares were rising 6% post-earnings on Tuesday and are now up nearly 50% from their early-September lows, is a good case in point. The…
2019-12-10 16:03:50-05:00 Read the full story…
Weighted Interest Score: 2.4022, Raw Interest Score: 1.2839,
Positive Sentiment: 0.2485, Negative Sentiment 0.2485

Cash management for multinationals and global banks

Managing cash across multiple banks usually involves numerous tokens to access proprietary and isolated bank portals, or for the more complex treasury operation, different file or SWIFT based links to each bank. As a consequence, information is not always consolidated for ease of reporting and intuitive cash management. Lengthy waits for confirmation that payments have been made or received are par for the course. Disparate file formats can make …
2019-12-09 00:00:00 Read the full story…
Weighted Interest Score: 2.3713, Raw Interest Score: 1.5095,
Positive Sentiment: 0.3533, Negative Sentiment 0.1820

Banks to re-think customer data usage

Customer expectations of their data usage may not match that of banks according to a panel at FinTech Connect in London this week.

“I think there’s a very fine line between using the data in a way that increases trust and makes the customer feel safe and guided, and then on the other side trying to sell stuff to them,” said Swedbank’s chief product officer, corporate and cash management, Carolin Runnquist.

The bank recently conducted research i…
2019-12-04 00:00:00 Read the full story…
Weighted Interest Score: 2.3394, Raw Interest Score: 1.2521,
Positive Sentiment: 0.1318, Negative Sentiment 0.0000


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