Do well-adopted datasets suffer from alpha decay?
Barney Bruce-Smythe, Senior Associate (London)
The prevalence of novel data sources has consistently grown in the last few years. In 2023, IMIR estimated the alternative data market was worth $7.2bn and would rise to $190bn by 2031. As datasets gain more users, however, it can often dilute opportunities for alpha. We summarise a paper that investigates the impacts of crowding and the triggers of alpha decay.
LITERATURE
We discuss findings from the 2024 INSEAD working paper, “