HOW GEOLOCATION DATA IS BOOSTING INVESTMENT RETURNS

In the dogged pursuit of maximizing investment returns, the procurement of alternative data—that is, data from non-traditional sources—is no longer a niche practice.

On the contrary, something of an arms race has developed over the last few years among investment firms, each keen to get its hands on the most inaccessible yet most insightful data available. Indeed, this type of data is transforming the very nature of investment firms, pushing them to develop more robust quantitative trading capabilities.

Among the types of alternative data now highly sought after is geolocation data.

In a world that’s increasingly connected by social media and online communities, it is not only who we are that is open for all to see, but also where we go and what we do at those locations.

The places people visit on a daily or weekly basis can be incredibly illuminating for investors keen to gain more understanding of consumer habits and, as a result, which businesses are experiencing considerable customer demand and which are not.

Estimates currently place the number of smartphone users worldwide at well over three billion. Each smartphone contains at least two or three apps that use location-tracking technology to record where the smartphone user is at any given time of the day.

Whether it’s Facebook, Instagram, a ride-hailing app such as Uber or even shopping apps, the process of “checking in” to a certain location allows those apps to determine where we are, for how long and even with whom.

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