Back-testing

Back-testing

Creating a hypothetical portfolio performance history by applying current asset selection criteria to prior time periods.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

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.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved
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