In "The Challenges of Analysing Data", Colin Lambert moderated an interesting discussion between John Ashworth (Caplin), Hasan Amjad (Cantab) and Andrew Ralich (oneZero).
More data is available than ever before, but analysis does not come without challenges.
Some key takeaways:
- Key drivers - data is becoming democratised, with smaller firms able to access more and better data. Cloud and analysis tools are available at a fraction of previous costs. Regulation since 2008 has forced banks to capture and clean data for regulatory reporting. This clean and normalised data can be used for business intelligence.Data sets have not changed significantly, but the real changes have taken place in infrastructure and software.
- Not everyone is equal - FX is still fragmented, with multiple data sets and microsecond data updates, so speed is vital for Alpha traders and for Market Makers.
- The pros and cons of democratisation - if everyone uses the same data in the same way this can cause market stress. Diversity of data enables algos to trade effectively without trying to take the same positions. Uniformity makes data easier to access, but fewer data providers makes the market fragile and brittle.