Back test

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Back Test

To use past data to predict future events. Researchers use back testing to find relationships between apparently unrelated events and determine if one causes the other. One may conduct back testing to inform one's investment decisions or strategy, though the practice is not always accurate because a great number of inputs cause economic events.

Back test.

A back test simulates the investment return that an investment strategy would have produced over a specific period.

For example, someone who wanted to evaluate a strategy of buying after stock splits might test the effect of having purchased 500 additional shares in the large-cap stocks in a hypothetical portfolio each time one of the stocks split during the period from 1957 to the present.

Back testing is sometimes used to support a current investment strategy by demonstrating that it would have enjoyed strong past performance. Critics point out that the testing period that's chosen has a significant impact on the results and that past performance doesn't guarantee future returns.

References in periodicals archive ?
OneTick's powerful analytical tools will enable Ergon to employ their quantitative research techniques on historical tick data for trading opportunities, run historical simulations & strategy back tests and perform transaction cost analysis (TCA).
Full Flex component object recognition and property testing allows these teams to reliably record and play back tests that validate the Flex application is running as expected.
All back tests are posted on the website for visitors to view and compare to other trading systems available.
Shift Theory Ratios are the first and only indicators that back test profitably across most markets.
Ronin Capital LLC is using S-PLUS 7, a de facto industry standard software platform for statistical data analysis and predictive analytics, to perform back tests of equity trading strategies on large stock data sets.
In the past, we have had to break our data sets into pieces and rely on multiple batch files to perform back tests of equity trading strategies on a large stock universe.
By only selecting stocks that presently survived history, heavy caps will show roughly 1% extra annual gains compared to back tests that include today's dead but yesterday's active stocks.
1) Make watch lists of 50 to even 1000 stocks; back test them over the past dozen years.
In the past, we had to break our data sets into pieces and rely on multiple batch files to perform back tests of equity trading strategies on a large stock universe," said Jeff Wang, quantitative research analyst, at Ronin Capital.
Analysts are now able to build large predictive models, generate more accurate short-term volatility strategies, and back test large portfolios more efficiently.
Use WinSSD for BERT (Bit Error Rate Testing), throughput monitoring, loop back tests, and transmit pattern messages.
The majority of communications failures of the satellite loop back tests are attributed to atmospheric conditions.