Explained
Alternative data vs traditional data
Traditional data is what a company reports: filings and earnings. Alternative data is anything else that tracks the business, like card spend or social posts.
| Alternative data | Traditional data | |
|---|---|---|
| Comes from | Third parties and public activity | The company and the exchange |
| Examples | Card transactions, app downloads, web traffic, job ads, social posts | 10-K, 10-Q, earnings calls, share prices, analyst estimates |
| Frequency | Daily or weekly | Quarterly |
| Audited? | No | Annual reports are |
| Main weakness | Partial coverage and bias in the sample | Arrives late, and only what the company chooses to break out |
What is the difference between alternative data and traditional data?
Who produced it. Traditional data comes from the company itself, through its filings and calls, or from the market, through prices and volumes. Alternative data comes from somewhere else entirely: what shoppers spend, what people search for, what they post.
The appeal is timing. A quarterly report describes a quarter that ended weeks earlier. Activity data can show the same quarter while it is happening.
What are the limits of alternative data?
Coverage and representativeness. A card panel sees the customers of the banks in it; social data sees the people who post. Neither is the whole customer base, and a change in who is in the sample can look like a change in the business. It is a signal to read alongside filings, not a replacement for them.
Why brand-level data matters for consumer companies
A company that owns forty brands usually reports them in a handful of segments. The filing will not say how one snack or one sneaker line is doing. Data measured per brand, then added up per company, fills in a level of detail the reports leave out.
The alternative data on this site
Social attention for US stocks and ETFs: StockTwits watchers, sentiment and message volume, and Reddit posts naming each ticker, ranked daily by the Hype Score. For listed consumer companies, readings of the brands they own: Instagram followers and mentions, news and AI assistant answers. Nothing is estimated; an unmeasured value shows a dash.
Alternative data for stocksHow it is built
Alternative data vs Traditional data: common questions
- Is social media data alternative data?
- Yes. Posts, followers and engagement on public social platforms are one of the common kinds of alternative data.
- Is alternative data legal to use?
- Data gathered from public sources or licensed properly is widely used. The rules on material non-public information still apply, which is why reputable providers stick to public or anonymised data.
Related
Not investment advice. Kovered publishes StockTwits watcher, sentiment and message volume readings and counts of public Reddit posts that name a stock or ETF, plus, for listed consumer companies, readings of the brands they own. It does not publish share prices, forecasts, ratings or recommendations to buy, sell or hold anything. Do your own research. Read the full notice.