Measuring performance
Look-ahead bias
Using information in a backtest that was not actually available at the time.
How it works
It creeps in easily: using a company’s full-year figures from the day the year ended rather than the day they were published, or restated accounts that differ from what was originally reported.
The result is a strategy that looks excellent in testing and fails in practice, because it was quietly using tomorrow’s newspaper.
Related terms
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More in Measuring performance
- Mark to market
- Information ratio
- Money-weighted return
- Equity risk premium
- Nominal return
- Contribution to return
- Calmar ratio
- CAGR
All 29 Measuring performance terms · The full glossary, 433 terms
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