Alternative data is any type of data that falls outside of the traditional sources used by Wall Street analysts to generate investment ideas. This can include everything from satellite imagery to Twitter sentiment analysis. Alternative data providers offer a wide variety of services, ranging from providing raw data feeds to generating actionable insights for investors. While the use of alternative data has exploded in recent years, there is still a lot of skepticism among investors about its usefulness.
Some of the emerging trends in alternative data include the use of social media data for sentiment analysis, the use of satellite data for tracking economic activity, and the use of wearables data for health and fitness tracking.