Understanding investors’ utilisation of alternative data can provide a valuable reference point for seasoned data veterans and new entrants alike. To this end, we review a paper that examines the potency and usage of alternative data in sell-side research. We highlight which dataset types yield the greatest improvement for earnings forecasts and what this could mean for the informational advantages between hedge fund and non-hedge fund investors.

LITERATURE

We review the paper ‘The use and usefulness of big data in finance: evidence from financial analysts’ by Feng Chi, Byoung-Hyoun Hwang and Yaping Zheng (2024).

This paper complements Neudata’s previous research, which assessed the difference in availability of alternative datasets to the sell-side and buy-side.