Glossary · Lesson 6.16

Survivorship Bias

If a backtest only includes companies that still exist today, it ignores the losers that left the index, making results look better than they really would have been.

Definition

If a backtest only includes companies that still exist today, it ignores the losers that left the index, making results look better than they really would have been.

In FactorSage

Avoided when backtesting against the S&P 500 universe because point-in-time membership keeps delisted constituents in the simulation.

Survivorship biasBacktesting