Analysis of Alternative Data for Portfolio Management Decisions

This report examines the application of alternative data, specifically credit card transaction data, within the context of portfolio management. The introduction highlights the importance of data sets in evaluating an index's performance and the report's focus on using credit card transactions to improve portfolio effectiveness. The main body details the benefits of alternative data, reviews relevant literature, and conducts a quantitative analysis of the dataset, including data availability, volume, coverage, and cost. The report uses credit card transaction data from various UK-based corporations, focusing on the security provided by transactions. The quantitative analysis involves statistical measurements to assess corporate price changes based on credit card services. The conclusion emphasizes the value of quantitative techniques in making data-driven portfolio management decisions, underscoring the significance of alternative data sources in enhancing operational analysis and achieving better investment outcomes.

PORTFOLIO
MANAGEMENT

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
MAIN BODY..................................................................................................................................1
1. Using alternative data which incorporate in portfolio management........................................1
2. Reviewing the literature as per using data source...................................................................2
3. Quantitative analysis on dataset...............................................................................................2
Availability of data......................................................................................................................2
Volume of data............................................................................................................................2
Coverage of data..........................................................................................................................2
Cost of data..................................................................................................................................3
4...................................................................................................................................................3
CONCLUSION................................................................................................................................3
REFERENCES................................................................................................................................4

INTRODUCTION
Portfolio management is the aspect through which an investor analyses the capabilities and
efficiency of an index in providing expected returns. However, it can be measured through data
set presented by the industries listed in the index which helps in repressing the clear and reliable
information. In the present report, there have been use of alternative data as credit card
transaction which would be adequate in making effectiveness of the portfolio.
MAIN BODY
1. Using alternative data which incorporate in portfolio management
Using an alternative data set will bring higher benefits to the investment. There have been
various alternative data set to emerge are fewer robust in capabilities for supporting the Alpha
generation. However, generation of alternative data is basically based on the traditional
information sources. Therefore, it provides the insights beyond on which industries regular data
sources are capable of providing information (JP Morgan: Alternative Data Is Altering
Investment Landscape, 2017). To analyse the effectiveness of the portfolio management is being
based on selecting the adequate alternative sources of data collection which would be effective
and adequate in making validate assumption. To process the accuracy of the data set ion which
there have been implication of credit card transaction technique which would be effective in
amending the adequate analysis over the data base (Make informed decisions with the FT, 2019).
The investigation on the credit cards transactional users for the various corporate agencies
working in UK the data have been gathered through Data.World
Credit card transaction as a source:
Analysing the information based on the number of users stated in UK regarding the credit
card transactions on which there are influences of various transactional activities which is being
based on adding the legal protection if a consumer is buying product and services from a
company. Therefore, this is the money security of covers over the transactional activities which
have been performed by consumers (Selling data to feed hedge fund computers is one of the
hottest areas of finance right now, 2017). The relevant bank or financial institution will make
payment to the expenses done by the consumers based on their revenue and reserves at the back
account. The reason behind selecting this alternative variable is for examining the effectiveness
of the credit card operations in the economy as well as protection being facilitated by the
government. It ensures proper protection regarding credit card transactions (The Roles of
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Alternative Data and Machine Learning in Fintech Lending: Evidence from the LendingClub
Consumer Platform, 2019).
2. Reviewing the literature as per using data source
As per the views of Graves, Acquisti and Christin, (2018), Credit card businesses have
been impacting the interest of investors in the business. Similarly, banking organisation have
impacts on the investors as they are seeking for the relevant sources through which they could
improve capital generation. Thus, to attract the large number of investors banks usually bring
higher dividend. Along with this, it encourages the rise in interest rates for the short terms as
well as long terms debts. Fan and et.al., (2018) stated that, measuring the consequences on which
investors are unable to make proper ascertainment of the operations. However, in relation with
considering the credit cards operations on which using the reliable information will be effective
in making better ascertainment of the operational gains
Batiz-Lazo and Del Angel, (2018), demonstrated that, fluctuations in interest rate invites
inflation in the country. However, it has been a challenging aspect through which a banking
business has to consider appropriate interest rates as well as divided to attract the number of
investors. Therefore, balancing such aspects will be helpful to the industry in leading the market
as well as retaining effective gains. Graves, Acquisti and Christin, (2018), demonstrated that,
ascertainment of expected rate of return on which measuring better outcomes will be reliable for
the investors in decisions making.
3. Quantitative analysis on dataset
Availability of data
In relation with analysing the qualitative analysis over the changes incurred in the prices of
these corporation as per their credit card transactional services have been determined as per
collected data. However, the data set have been analysed on the basis of implicating the
statistical measurement to ascertain the outcomes (Credit Card Data, 2019).
Volume of data
In relation with analysing the outcomes on which there has been consideration of data set
which was generated as per credit cards transaction made in corporations during 2016 and 2017.
Coverage of data
The data have been gathered from the credit card transactions made by Amazon UK, Royal
mail, Text bond etc.
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Cost of data
The collection of data is does not cost as it’s is available on the data.world site as well as
on the governmental sites (There are 17 banking datasets available on, 2018).
4.
As per analysing the outcomes based on the above analysed data base on which it can be
said that there have been implications of various traditional aspects on which one could have
easily analyse and ascertain the data base to make effective analysis over the growth of these
corporation in relation with such approaches on which it can be said that, considering the
traditional data from balance sheet, income statement as well as cash flows will only be adequate
in terms of defining the trend analysis. There will be stimulation on the growth of sales,
operating income as well as net profit of the firm (The State of Alternative Credit Data, 2018).
CONCLUSION
On the basis of above report, on which it can be said that managing the portfolio will be
influential with respect to have better operational ascertainment and analysis. Therefore, there
had been use of quantitative techniques to analyse and make a validate decision on the data base.
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REFERENCES
Books and Journals
Graves, J. T., Acquisti, A. and Christin, N., 2018. Should Credit Card Issuers Reissue Cards in
Response to a Data Breach?: Uncertainty and Transparency in Metrics for Data Security
Policymaking. ACM Transactions on Internet Technology (TOIT). 18(4). p.54.
Fan, B. and et.al., 2018. Development of tactical solutions for the e-credit card issuing
industry. International Journal of Accounting & Information Management. 26(1).
pp.115-131.
Batiz-Lazo, B. and Del Angel, G. A., 2018. The Ascent of Plastic Money: International Adoption
of the Bank Credit Card, 1950–1975. Business History Review. 92(3). pp.509-533.
Online
Credit Card Data. 2019. [Online]. Available through :<
https://www.gsam.com/content/gsam/global/en/market-insights/gsam-insights/
quantinomics/credit-card-data.html>.
JP Morgan: Alternative Data Is Altering Investment Landscape. 2017. [Online]. Available
through :< http://www.integrity-research.com/jp-morgan-alternative-data-altering-
investment-landscape/>.
Make informed decisions with the FT. 2019. [Online]. Available through :<
https://www.ft.com/content/d86ad460-8802-11e7-bf50-e1c239b45787>.
Selling data to feed hedge fund computers is one of the hottest areas of finance right now. 2017.
[Online]. Available through :< https://qz.com/1082389/quant-hedge-funds-are-gorging-
on-alternative-data-in-pursuit-of-an-investing-edge/>.
Selling data to feed hedge fund computers is one of the hottest areas of finance right now. 2017.
[Online]. Available through :< https://qz.com/1082389/quant-hedge-funds-are-gorging-
on-alternative-data-in-pursuit-of-an-investing-edge/>.
The Roles of Alternative Data and Machine Learning in Fintech Lending: Evidence from the
LendingClub Consumer Platform. 2019. [Online]. Available through :<
https://www.philadelphiafed.org/-/media/research-and-data/publications/working-
papers/2018/wp18-15r.pdf>.
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The State of Alternative Credit Data. 2018. [Online]. Available through :<
https://www.experian.com/assets/consumer-information/white-papers/alternative-credit-
data-paper.pdf>.
There are 17 banking datasets available on. 2018. [Online]. Available through :<
https://data.world/datasets/banking>.
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