Statistics

Cross-validation

Estimating out-of-sample performance by repeatedly training on part of the data and testing on the rest.

The trap that matters here. Standard k-fold cross-validation is invalid for time series - random folds train on future data to predict the past.

Use walk-forward validation: train on a window, test on the period immediately following, roll forward. Leave a gap between train and test when features have look-ahead spans, or information leaks across the boundary.

The deeper problem. Repeatedly checking cross-validated performance and adjusting the model makes the estimate optimistic. The only genuinely clean estimate comes from data you have looked at once.

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Experiment Design for Quant Research

How to design a test that can actually change your mind, and the questions interviewers ask about validation.

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