Over the years, alternative data has become a powerful tool in stock trading helping investors get an inside scoop on companies, stay ahead of the curve, and make informed stock picks. However, these non-traditional data sources like job postings, social media followers, and employee satisfaction can also help them outperform the market.
According to data from AltIndex.com, using alternative data has enabled this AI platform to predict the stock market with a high 70% success rate.
Although essential, traditional financial analysis may not always provide a complete picture of a company’s performance and potential. That’s where AI and alternative data come in handy.
AltIndex algorithm analyses millions of data bits across the Internet, helping investors to make more informed decisions. The algorithm’s performance in February proves the enormous potential of combining AI and alternative data analysis in stock picking.
Statistics show almost 70% of all stock picks in February resulted in gains, contributing to an overall positive return of 27%. This was a strong follow-up to January, which saw 85% successful stock picks.
Opera (OPRA) and Remitly (RELY) were the top-performing stocks from the AltIndex February recommendation. Six months ago, the AltIndex algorithm marked Opera (OPRA) as a good buy based on a spike in business outlook, app downloads, and several other factors. Since then, the company’s stock price surged by a massive 139%.
Remitly (RELY) was another successful buy recommendation made on several positive indicators including job posts, employee satisfaction, mobile app downloads, and a month-over-month spike in YouTube subscribers. Since the algorithm recommended buying the stock in February, its price jumped by more than 91%.
The sell recommendation for Bed, Bath & Beyond (BBBY) was also spot on. Six months ago, the company’s job posts took a nosedive and sentiment across popular stock forums plummeted, turning it into a sell recommendation. Since then, the company has gone out of business, and its stock has been delisted from the NASDAQ exchange.
With artificial intelligence and alternative data stock trading becomes much easier and faster. That is why more and more traders base their investments on AI stock picks.
According to an eToro survey conducted in June among 1 000 US retail traders, most are ready to jump headfirst into AI portfolio management. Statistics show around 40% of them, or two in five respondents, are open to using or are already using artificial intelligence to change investments in their portfolio. Younger investors, aged between 18 and 44, are even more open to AI stock picks, with 71% using AI to grow their assets.
The survey also showed one-third of respondents believed AI technology picks better investments than a traditional fund manager, while almost two-thirds would allow artificial intelligence to alter and execute trades for them.