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 ?
It takes a lot of resources to back test some datasets and a lot of them are quite dirty and need a lot of work to be tagged and structured.
The 1 back and the 2 back versions of the N back test [10] were used.
Any back test has to be taken with a grain of salt, because you never see the nine back tests that didn't work before they got to the tenth.
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.
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.
Buoyed by hosting the first few matches of Pakistan Super League 2019's Karachi leg, the Pakistan Cricket Board (PCB) is planning to bring back Test cricket to the country.
Before she gave the go-ahead for the scent she brought back test samples from France to the Liverpool suburb of Croxteth to try out on family, friends and her fiance Wayne Rooney.
Savvy Coleen brought back test samples from France to try out on friends, family and Wayne.
Despite playing a major part in back- to back Test victories over West Indies at Lord's and Edgbaston over the last fortnight, England coach Duncan Fletcher has allowed Flintoff to appear for the semifinals and finals day at Edgbaston this weekend.
He said that though the portfolio appeared large, all the provisions made had been back tested.