Why Data Scraping is the Next Frontier in Battle for Investment Returns
Updated: Feb 9, 2021
There is a reason why investment firms exalt the importance of data scraping. There was a time when a money manager would assess sales performances by dispatching a junior grunt to the local store. Today, it is possible that a hedge fund may monitor your emails for hints on how Amazon, the world’s largest online retailer, would perform in the next holiday season.
That’s the power of data scraping in e-commerce today!
Asset managers seek the investment edge which could potentially earn them huge monetary gains. A large part of discovering this edge involves the use of latest technologies to amass huge amounts of data, thus enabling them to evaluate the market scenario.
There are technology firms which offer services to scan incoming emails for sales information from say Amazon or Walmart and log that data in a database. This database is thereafter supplied to hedge funds, thanks to third party vendors.
Alternative Data to the Rescue
Retailers and hedge fund managers have slowly begun to comprehend the importance of alternative data in helping them form effective business strategies. Investors now resort to scouring e-mails of consumers for nuggets of such information. This is only the tip of the ice berg. There is a horde of untapped digital information from online activities which can be scraped, aggregated and sold to investment firms looking for the “market disrupting idea.”
The world’s annual data generation is predicted to reach 44 zettabytes (trillions of gigabytes) by 2020. To grasp the scale of this statistic, put all this information in iPad tablets and the stack would reach from Earth to Moon 6 times over.
Thankfully, while the amount of global data generated daily is proliferating, computing power has kept its pace to handle such copious amounts of data. Combine this high-end technology with the uprising Artificial Intelligence, investment groups will be able to unearth profitable insights from enormous amounts of data and are looking at a future of predictive decision making.
Data Scraping for Investors
There is no dearth of sources of alternative data. Global digitization trends, social media, open web data, and technology are producing streams of unstructured alternative data. However, every new revolution comes with its set of challenges and apprehensions. There often comes a question of privacy and ease of use of this data. While scraping, selling and buying data is legal in most countries, they must adhere to necessary safeguards. Another challenge lies in the quality of personal data in the scrubbed data sets. While third party vendors do a good job, the standards are not currently uniform.
Currently, alternative data is garnering huge popularity among fund managers. Consequently, there may come a point when quarterly corporate report earnings and monthly economic data may become obsolete. Big data is offering investing insights – strong or weak. But it is difficult
to comprehend that it would completely replace traditional investment information in the
However, this technological wave of data driven investments along with traditional investment knowledge is a powerful amalgamation of technology with traditional information. This bestows the power of considering dynamic market factors and consumer behavior into play while crafting important market decisions.
Wish to utilize the power of web data for your online business? Contact Datahut for Data Scraping services.