A store opens, a trend goes viral, or a product launches. Yet, the companies directly involved in these developments are not the only ones that benefit. Businesses do not operate in isolation and can profit from their proximity to social, cultural or behavioural hubs. In other words, demand is often borrowed rather than created. In this report, we explore how alternative data can detect borrowed demand early, revealing winners and losers before earnings calls.

Why should investors care?

For investors, this phenomenon has direct implications for capital allocation. Assets that appear to generate organic demand may owe part of their performance to borrowed activity, whether that proximity is physical, temporal or behavioural. However, this is rarely visible in traditional data. As a result, borrowed demand can provide a view into momentum that has not yet been priced in.