The likelihood that an alternative dataset contains a signal that is sufficiently predictive to drive a strategy on a stand-alone basis with a high Sharpe ratio for a meaningful period is inversely related to its availability and ease of processing. In other words, the more exclusive, and the harder to process the data, the better the chances that a dataset with alpha content can drive a strategy without suffering rapid signal decay.

Public fundamental data that provides standard financial ratios contains little alpha and is not attractive for a standalone strategy, but may help diversify a portfolio of risk factors. Large, complex datasets will take more time to be absorbed by the market, and new datasets continue to emerge on a frequent basis. Hence, it is essential to assess how familiar other investors already are with a dataset, and whether the provider is the best source for this type of information.

Additional benefits to exclusivity or being an early adopter of a new dataset may arise when a business just begins to sell exhaust data that it generated for other purposes because it may be possible to influence how the data is collected or curated, or to negotiate conditions that limit access for competitors at least for a certain time period.