Group Co.
Buy Side Delves into Mobile Data
Traders Magazine Online News, September 7, 2017
As hedge funds and quantitative asset managers hunt for unique sources of alpha, Wall Street’s attention is turning to analysis of location data generated by mobile phones.
Location data from mobile phones is now at the forefront of the push to combine data science techniques with machine learning techniques to produce actionable information on company fundamentals.
Third-party aggregators are seeking to quench the thirst of hedge funds for non-traditional datasets.
On Aug. 9, Thasos Group, an alternative data intelligence startup, launched Streams, a real-time location information feed that transforms mobile phone data into actionable insights for traders, investors and other business managers.
With GPS enabled phones spewing out torrents of data every minute, Thasos has built up the largest repository of location data after Apple and Google, the company said.
Thasos obtains data from hundreds of millions of mobile phones, which is then mapped to every store or venue owned by over 400 public companies. It then filters the location data from the cell phones, with the longitude/latitude coordinates from every venue owned by the 400 public companies.
This way, it can provide a more timely and accurate picture of foot traffic to retail stores, restaurants, malls and airports, deliveries to loading docks, hours worked on assembly lines and patient counts in hospitals.
Formed in 2011 and spun out of MIT Media Lab, Thasos has been selling its location information feed to about 25 hedge funds over the past two years.
Demand for location data is growing, “not because of its historical availability, but due to the ability to extract value from it,” said John Collins, founder and chief product officer at Thasos in New York.
The most comparable data set in terms of forecasting earnings has been credit card transaction data, which has been a staple of hedge funds for the past two years, explained Collins. “But location data is a lot messier and a lot larger and is a lot bigger of a problem to solve since it comes from many different sources,” he said.
One hurdle is that most apps have not historically logged the locations of their users. Thasos said it knows the sources that have consistently logged their data for the past two or more years. Thasos obtains the cell phone data from app providers, whom they contract with directly.
“We’re in a position to know so we are well positioned to deliver data in the hedge fund space with respect to calculating the year-over-year change,” said Collins.
The trend has exploded in the retail sector where analysts at hedge funds and quantitative fund managers are vying for an edge.
Even before a company reports its quarterly earnings or same store sales, Thasos can calculate the foot traffic in venues owned by companies like Home Depot. “We cover 2,000 Home Depots, all 4,500 Walmarts and hundreds of thousands of locations for public companies,” said Collins.
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