Definition
Alternative Data
Non-traditional data sources used by investors to gain insights beyond conventional financial metrics.
Alternative data encompasses information from non-traditional sources that investors use to generate alpha. Examples include satellite imagery (parking lot traffic, crop yields), credit card transaction data, web scraping (pricing, reviews), social media sentiment, and geolocation data. Alternative data complements primary research by providing quantitative signals that can validate or challenge qualitative insights from expert interviews. The alternative data market has grown significantly as investors seek unique information edges.