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 ?
Neat features on the iFlip platform include the ability to backtest "every stock, with every algorithm, all the way back to 2004," Tate said.
Backtest and novelty behavior of female and castrated male piglets, with diverging social breeding values for growth.
Effect of long transport and environmental conditions on behaviour and blood parameters of postweaned piglets with different reactivity to backtest. Livest Sci 162: 201208.
We will not be able to judge Brexit's impact for many years and its success, or otherwise, will not be a simple hypothesis to backtest. What happens in Europe matters -upcoming elections in France and Germany will tilt the balance and timing of the negotiation of our exit from the EU.
The text provides four original algorithms and a backtest system for determining how well trading strategies work, as well as empirical results on evaluation of cumulative wealth, risk and risk-adjusted return, and parameter sensitivity.
Thus, it is an appropriate objective to measure and backtest the systemic risk during the 2001 dot-com bubble and the 2007-2009 financial crisis.
No Brasil, a taxa Selic diaria, utilizada como benchmark para retornos de alocacao no ativo livre de risco, passou por enormes variacoes no periodo de realizacao do backtest da estrategia de alocacao dinamica.
Como los residuos de los modelos estimados presentaron exceso de curtosis se aplicara un backtest, segun Fernandez (2006), que consistira en construir un intervalo de confianza para las series de retornos, y observar el numero de violaciones se producen debidas a movimientos extremos en los retornos debidas a alzas bruscas en los precios.
The DRM provided consistent, positive price improvement of 2-6 bps over the backtest period.
Additionally, Strategy Trader provides clients with 500,000 bars of historical data and the ability to backtest with both bid and ask prices.
A backtest is a prediction of future credit risk using historical data for the explanatory variables and the actual DWPD in the base year for the prediction.