Portfolio Analytics
Look-Ahead Bias
Definition
What is Look-Ahead Bias?
The error of using information in a historical test before it would actually have been available.
Example in practice
How This Looks in Practice
A backtestA simulation of how an investment strategy would have performed using historical data. selects companies using annual results published months later.
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Related Terms
Portfolio Analytics
Correlation
A statistic ranging from minus one to plus one that describes how two return series move together.
Portfolio AnalyticsPositive Correlation
A relationship in which two assets tend to move in the same direction.
Portfolio AnalyticsNegative Correlation
A relationship in which two assets tend to move in opposite directions.
Risk ManagementStress Test
An analysis of portfolio performance under severe but plausible scenarios.