Back test

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 ?
The 1 back and the 2 back versions of the N back test [10] were used.
A stronger regulatory focus on managing interest rate risk on the balance sheet has brought to the forefront the requirement that institutions back test their IRR models.
Anger as rail Tributes paid travellers hit by to 'inspirational' inflation-busting city political fare rises - for the 10th year giant Page 8 in a row Page 4 Bitter battle As Aston Martin over piece of celebrates 100 land on city's years, a former 'golden mile' engineer and to head back test driver looks to court back at the Page 10 glory days Pages 12-13 When Man Birmingham tasked with froze: Special transforming picture special international on the 50th trade anniversary of remembers extreme winter Page 14 being trapped in Congo civil war Page 18 LETTERS PAGES 24-25 PERSONAL FINANCE PAGE 35 NEIL ELKES PAGE 26 LEGAL PAGE 36 RICHARD McCOMB PAGE 27 FINANCE PAGE 37 BUSINESS VIEW PAGE 28 MANUFACTURING PAGE 38 COMMERCIAL PROPERTY PAGES 32-33 SPORT PAGES 43-48
Algorithmic strategies developed on 4th Story's platform can now track the performance of other strategies as they make their investment decisions, meaning trading strategists can back test the effect of different sizing techniques on the overall return of their portfolio of automated strategies.
Savvy Coleen brought back test samples from France to try out on friends, family and Wayne.
Borders bring back Test wing Craig Moir for the game with Neath-Swansea Ospreys at Netherdale, with Edinburgh aiming to arrest their recent slide at home to Munster.
ITD Lookback[TM] enables legal, risk and compliance groups to back test employee trades, company proprietary trades or discretionary trades for clients, or combination, against its database of market moving issuer events currently used in its single stream risk and compliance platform.
Police have yet to get back test results on hair taken from a duffel bag and saliva found on a pillow in the car.
Some performance data for the Wisdom Tree Indexes is based on a back test, i.
PERTH, Scotland -- The numbers speak for themselves in the back test results announced by recently launched StocksMonthly.
In the case of issuers of hybrids that experienced financial problems during the corporate downturn of 2000-2003, the corporate back test confirmed that hybrid securities absorbed loss and provided financial flexibility in a manner similar to preferred stock.