Market participants increasingly are using data to generate alpha, opening opportunities both to investors and to Wall Streeters looking to get in on the next big wave.
On the investing side, big data is helping provide insights into consumer behavior that can be used to gauge whether a company is meeting the needs of its sales base or is falling short.
On the employment side, a new type of hybrid worker who knows both quantitative strategy and fundamental analysis using statistics and data gathering will find strong demand heading into the future, according to speakers Thursday at the Delivering Alpha conference, presented by CNBC and Institutional Investor.
“An extraordinarily compelling investment opportunity is ahead of us,” said Ulrike Hoffmann-Burchardi, Tudor Investment senior portfolio manager. “I think you’ll see in every industry vertical businesses being reinvented around data. That’s very interesting. I think even more interesting is the company’s being the tool providers.”
The change will result in the rise of “quantamentalists” who combine quantitative and fundamental analysis to harness the explosion of data.
“It will be years before they’re portfolio managers who are that full, complete package,” said Matthew Granade, Point72 Asset Management’s chief market intelligence officer.
Granade has used big-data applications to make money.
He specifically cited shorts the firm took against Weight Watchers and Dave and Buster’s that employed data on consumer use and trends that became profitable.
Similarly, Michael Recce, chief data scientist at Neuberger Berman, said the firm used data about how Lululemon’s mostly female customer base was expanding to include more men, and how the Starbucks loyalty program was impacting that company.
“The future is going to be this combination of the quantitative processes … as well as the data sets,” Recce said.