add cross-sectional signal evaluation (factor rank-IC) to the backtest
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The per-setup hit-rate report can't tell whether a signal predicts returns —
only how a target/stop structure built on one performs. This adds a
cross-sectional factor-IC pass: each week the universe is ranked by a price-only
signal and graded by its rank correlation (Spearman IC) and top-minus-bottom-
quintile spread against the forward 30-day return.

Candidate signals (point-in-time from price; sentiment/fundamentals have no
history in the replay): 12-1/6-1/3-1 month momentum, 1-month reversal,
price-vs-200d SMA, proximity to the 52-week high (George/Hwang), and 126-day
realized volatility (low-vol anomaly).

Reuses the existing per-ticker replay loop (no new data, no second DB pass);
results land in the cached backtest_report as `signal_eval` and render as a
"Signal edge" table in BacktestPanel beside the calibration curve.

330 backend tests pass (10 new in test_signal_eval); frontend build clean.

Co-Authored-By: Claude Opus 4.8 <noreply@anthropic.com>
This commit is contained in:
2026-06-23 17:58:40 +02:00
parent c34f3cb1a4
commit 402025692a
5 changed files with 432 additions and 1 deletions
+198
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@@ -16,6 +16,8 @@ from __future__ import annotations
import json
import logging
import math
from collections import defaultdict
from collections.abc import Callable
from datetime import datetime, timezone
from types import SimpleNamespace
@@ -70,6 +72,15 @@ ATR_MULTIPLIER = 1.5
_CAL_BUCKETS = [(0, 20), (20, 40), (40, 60), (60, 80), (80, 100.01)]
# Cross-sectional signal evaluation (factor IC). Each candidate signal is a
# point-in-time number computed from closes alone (sentiment/fundamentals have no
# history here), sampled one as-of per ISO week, and graded by how its rank
# correlates with the forward HORIZON-day return ACROSS the universe — i.e. does
# ranking stocks by this signal sort tomorrow's winners from losers. This is the
# test the per-setup hit-rate report can't do: it measures predictive power of a
# signal, not the outcome of a target/stop structure built on top of one.
MIN_CROSS_SECTION = 20 # min tickers present in a week to score that week
def _wrap_levels(level_dicts: list[dict]) -> list[Any]:
return [
@@ -270,6 +281,180 @@ def _calibration(cands: list[dict]) -> list[dict]:
return rows
# ---------------------------------------------------------------------------
# Cross-sectional signal evaluation (factor information-coefficient)
# ---------------------------------------------------------------------------
def _weekly_asof_indices(records: list) -> list[int]:
"""Index of the last bar in each ISO week — the weekly rebalance as-of bars.
Keying on the calendar week (not the raw bar index) makes every ticker's
as-of dates line up, so the cross-section on a given week is comparable.
"""
last_by_week: dict[tuple[int, int], int] = {}
for idx, r in enumerate(records):
iso = r.date.isocalendar()
last_by_week[(iso[0], iso[1])] = idx
return sorted(last_by_week.values())
def _signal_values(closes: list[float], highs: list[float], i: int) -> dict[str, float]:
"""Point-in-time candidate signals at as-of index ``i`` (price-only).
Momentum factors follow the standard "skip the last month" convention
(return up to ~1 month ago) to avoid the short-term reversal effect, which
``reversal_1m`` isolates on purpose — we expect its IC to be negative if the
universe mean-reverts. ``trend_200`` is price vs its 200-bar SMA. ``high_52w``
is closeness to the trailing 52-week high (George/Hwang anchoring effect:
higher = nearer the high, expect positive IC). ``vol_6m`` is 126-day realized
volatility (expect negative IC if the low-volatility anomaly holds).
"""
out: dict[str, float] = {}
if i - 252 >= 0 and closes[i - 252] > 0:
out["mom_12_1"] = closes[i - 21] / closes[i - 252] - 1.0
if i - 126 >= 0 and closes[i - 126] > 0:
out["mom_6_1"] = closes[i - 21] / closes[i - 126] - 1.0
if i - 63 >= 0 and closes[i - 63] > 0:
out["mom_3_1"] = closes[i - 21] / closes[i - 63] - 1.0
if i - 21 >= 0 and closes[i - 21] > 0:
out["reversal_1m"] = closes[i] / closes[i - 21] - 1.0
if i - 199 >= 0:
sma = sum(closes[i - 199 : i + 1]) / 200.0
if sma > 0:
out["trend_200"] = closes[i] / sma - 1.0
if i - 251 >= 0:
high_52w = max(highs[i - 251 : i + 1])
if high_52w > 0:
out["high_52w"] = closes[i] / high_52w
if i - 126 >= 0:
rets = [
closes[k] / closes[k - 1] - 1.0
for k in range(i - 125, i + 1)
if closes[k - 1] > 0
]
if len(rets) >= 2:
mean = sum(rets) / len(rets)
var = sum((x - mean) ** 2 for x in rets) / (len(rets) - 1)
out["vol_6m"] = math.sqrt(var)
return out
def _accumulate_signal_series(records: list, collected: dict) -> None:
"""For each weekly as-of bar, emit (signal, forward-return) pairs keyed by ISO
week into ``collected[name][week_key]``. Forward return is close-to-close over
HORIZON trading days. Mutates ``collected`` (a dict of dict of list)."""
n = len(records)
if n < HORIZON + 21:
return
closes = [float(r.close) for r in records]
highs = [float(r.high) for r in records]
for i in _weekly_asof_indices(records):
j = i + HORIZON
if j >= n or closes[i] <= 0:
continue
fwd = closes[j] / closes[i] - 1.0
iso = records[i].date.isocalendar()
week_key = (iso[0], iso[1])
for name, val in _signal_values(closes, highs, i).items():
collected[name][week_key].append((val, fwd))
def _rank(xs: list[float]) -> list[float]:
"""Average (tie-corrected) ranks, 1-based."""
order = sorted(range(len(xs)), key=lambda k: xs[k])
ranks = [0.0] * len(xs)
i = 0
while i < len(xs):
j = i
while j + 1 < len(xs) and xs[order[j + 1]] == xs[order[i]]:
j += 1
avg_rank = (i + j) / 2.0 + 1.0
for k in range(i, j + 1):
ranks[order[k]] = avg_rank
i = j + 1
return ranks
def _pearson(a: list[float], b: list[float]) -> float | None:
n = len(a)
if n < 3:
return None
ma, mb = sum(a) / n, sum(b) / n
va = sum((x - ma) ** 2 for x in a)
vb = sum((y - mb) ** 2 for y in b)
if va <= 0 or vb <= 0:
return None
cov = sum((a[k] - ma) * (b[k] - mb) for k in range(n))
return cov / math.sqrt(va * vb)
def _spearman(xs: list[float], ys: list[float]) -> float | None:
"""Rank correlation = Pearson on the ranks. None if too few/degenerate."""
if len(xs) < 3:
return None
return _pearson(_rank(xs), _rank(ys))
def _quintile_spread(pairs: list[tuple[float, float]]) -> float | None:
"""Mean forward return of the top signal-quintile minus the bottom quintile."""
n = len(pairs)
if n < 10:
return None
ordered = sorted(pairs, key=lambda p: p[0])
k = n // 5
top = ordered[-k:]
bottom = ordered[:k]
return sum(p[1] for p in top) / k - sum(p[1] for p in bottom) / k
def _signal_evaluation(collected: dict) -> list[dict]:
"""Per-signal factor diagnostics, one row per candidate signal:
mean_ic average weekly rank-IC (Spearman of signal vs fwd ret)
ic_t_stat mean_ic / stderr — is the IC reliably non-zero?
ic_positive_pct share of weeks the IC is positive (consistency)
mean_quintile_spread avg top-minus-bottom-quintile forward return
A signal with no edge lands near IC 0 and spread 0. Caveat: weekly rebalances
with a HORIZON-day forward window overlap, so the t-stat overstates
significance — read it as directional, alongside ic_positive_pct.
"""
rows: list[dict] = []
for name in sorted(collected):
ics: list[float] = []
spreads: list[float] = []
sizes: list[int] = []
for recs in collected[name].values():
if len(recs) < MIN_CROSS_SECTION:
continue
ic = _spearman([r[0] for r in recs], [r[1] for r in recs])
if ic is not None:
ics.append(ic)
spread = _quintile_spread(recs)
if spread is not None:
spreads.append(spread)
sizes.append(len(recs))
if not ics:
continue
mean_ic = sum(ics) / len(ics)
if len(ics) > 1:
std = math.sqrt(sum((x - mean_ic) ** 2 for x in ics) / (len(ics) - 1))
else:
std = 0.0
t_stat = mean_ic / std * math.sqrt(len(ics)) if std > 0 else None
rows.append({
"signal": name,
"weeks": len(ics),
"avg_cross_section": round(sum(sizes) / len(sizes), 1) if sizes else None,
"mean_ic": round(mean_ic, 4),
"ic_t_stat": round(t_stat, 2) if t_stat is not None else None,
"ic_positive_pct": round(sum(1 for x in ics if x > 0) / len(ics) * 100, 1),
"mean_quintile_spread": round(sum(spreads) / len(spreads), 4) if spreads else None,
})
rows.sort(key=lambda r: r["mean_ic"], reverse=True)
return rows
async def run_backtest(
db: AsyncSession,
progress_cb: Callable[[int, int, str], None] | None = None,
@@ -283,12 +468,15 @@ async def run_backtest(
total = len(tickers)
candidates: list[dict] = []
# collected[signal_name][iso_week] -> list of (signal_value, forward_return)
collected: dict = defaultdict(lambda: defaultdict(list))
for index, ticker in enumerate(tickers):
if progress_cb is not None:
progress_cb(index, total, ticker.symbol)
try:
records = await query_ohlcv(db, ticker.symbol)
candidates.extend(_replay_ticker(ticker.symbol, records, config, activation))
_accumulate_signal_series(records, collected)
except Exception:
logger.exception("Backtest replay failed for %s", ticker.symbol)
@@ -327,6 +515,16 @@ async def run_backtest(
"min_expected_value": current_min_ev,
"sweep": sweep,
"calibration": _calibration(candidates),
"signal_eval": _signal_evaluation(collected),
"signal_eval_note": (
"Cross-sectional rank-IC of price-only signals vs the forward "
f"{HORIZON}-day return (weekly rebalance, min {MIN_CROSS_SECTION} "
"names/week). |IC| ≳ 0.03 with a consistent sign is a real (if small) "
"edge; near 0 means ranking on it sorts nothing. Momentum factors and "
"high_52w are expected positive; reversal_1m and vol_6m are expected "
"negative (mean-reversion / low-vol anomaly). Overlapping windows inflate "
"the t-stat — read directionally."
),
"note": (
"Sentiment & fundamentals held neutral (no point-in-time history). "
"~6 months ≈ one market regime — treat as directional, not gospel."
@@ -22,6 +22,29 @@ function rColor(v: number | null): string {
return 'text-gray-300';
}
const SIGNAL_LABELS: Record<string, string> = {
mom_12_1: '121 month momentum',
mom_6_1: '61 month momentum',
mom_3_1: '31 month momentum',
reversal_1m: '1-month reversal',
trend_200: 'Price vs 200-day SMA',
high_52w: 'Proximity to 52-week high',
vol_6m: '6-month realized volatility',
};
// An |IC| this large, with a consistent sign, is a real (if small) edge worth
// building on; below it, ranking on the signal sorts essentially nothing.
const IC_EDGE_THRESHOLD = 0.03;
function icColor(v: number): string {
if (Math.abs(v) < 0.02) return 'text-gray-400';
return v > 0 ? 'text-emerald-400' : 'text-red-400';
}
function fmtSpread(v: number | null): string {
if (v === null) return '—';
return `${v > 0 ? '+' : ''}${(v * 100).toFixed(2)}%`;
}
function timeAgo(iso: string): string {
const mins = Math.floor((Date.now() - new Date(iso).getTime()) / 60_000);
if (mins < 1) return 'just now';
@@ -247,6 +270,65 @@ export function BacktestPanel() {
)}
</div>
{report.signal_eval && report.signal_eval.length > 0 && (
<div>
<p className="mb-2 text-xs font-medium uppercase tracking-widest text-gray-500">
Signal edge (cross-sectional)
</p>
<p className="mb-2 text-[11px] text-gray-500">
Does ranking the universe by a signal predict the forward {report.params.horizon_days}-day
return? Mean IC is the rank correlation between signal and return, averaged over weekly
rebalances. <span className="text-emerald-400">|IC| {IC_EDGE_THRESHOLD}</span> with a
consistent sign (high IC&gt;0 %) is a real, if small, edge; near 0 means it sorts nothing.
Momentum skips the last month; <em>reversal_1m is expected negative</em> if the universe
mean-reverts. Q5Q1 is the top-minus-bottom-quintile forward return.
</p>
<div className="glass overflow-x-auto">
<table className="w-full text-sm">
<thead>
<tr className="border-b border-white/[0.06] text-left text-xs uppercase tracking-wider text-gray-500">
<th className="px-4 py-2.5">Signal</th>
<th className="px-4 py-2.5 text-right">Weeks</th>
<th className="px-4 py-2.5 text-right">Avg N</th>
<th className="px-4 py-2.5 text-right">Mean IC</th>
<th className="px-4 py-2.5 text-right">t-stat</th>
<th className="px-4 py-2.5 text-right">IC&gt;0 %</th>
<th className="px-4 py-2.5 text-right">Q5Q1 fwd</th>
</tr>
</thead>
<tbody>
{report.signal_eval.map((row) => {
const edge = Math.abs(row.mean_ic) >= IC_EDGE_THRESHOLD;
return (
<tr key={row.signal} className={`border-b border-white/[0.04] ${edge ? 'bg-emerald-400/[0.06]' : ''}`}>
<td className="px-4 py-2.5 font-medium text-gray-200">
{edge && <span className="mr-1 text-emerald-300"></span>}
{SIGNAL_LABELS[row.signal] ?? row.signal}
</td>
<td className="num px-4 py-2.5 text-right text-gray-400">{row.weeks}</td>
<td className="num px-4 py-2.5 text-right text-gray-400">{row.avg_cross_section ?? '—'}</td>
<td className={`num px-4 py-2.5 text-right font-semibold ${icColor(row.mean_ic)}`}>
{row.mean_ic.toFixed(3)}
</td>
<td className="num px-4 py-2.5 text-right text-gray-300">
{row.ic_t_stat === null ? '—' : row.ic_t_stat.toFixed(2)}
</td>
<td className="num px-4 py-2.5 text-right text-gray-300">{fmtPct(row.ic_positive_pct)}</td>
<td className={`num px-4 py-2.5 text-right ${rColor(row.mean_quintile_spread)}`}>
{fmtSpread(row.mean_quintile_spread)}
</td>
</tr>
);
})}
</tbody>
</table>
</div>
{report.signal_eval_note && (
<p className="mt-2 text-[11px] text-gray-600">{report.signal_eval_note}</p>
)}
</div>
)}
<p className="text-[11px] text-gray-600">{report.note}</p>
</>
)}
+12
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@@ -224,6 +224,16 @@ export interface BacktestSweepRow extends BacktestBucket {
min_expected_value: number;
}
export interface BacktestSignalEvalRow {
signal: string;
weeks: number;
avg_cross_section: number | null;
mean_ic: number;
ic_t_stat: number | null;
ic_positive_pct: number;
mean_quintile_spread: number | null;
}
export interface BacktestReport {
generated_at: string;
tickers: number;
@@ -236,6 +246,8 @@ export interface BacktestReport {
min_expected_value: number;
sweep: BacktestSweepRow[];
calibration: BacktestCalibrationRow[];
signal_eval?: BacktestSignalEvalRow[];
signal_eval_note?: string;
note: string;
}
+1 -1
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@@ -1 +1 @@
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+139
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@@ -0,0 +1,139 @@
"""Tests for the cross-sectional signal-evaluation (factor IC) pass."""
from __future__ import annotations
import random
from datetime import date, timedelta
from types import SimpleNamespace
from app.services import backtest_service as bt
# ---------------------------------------------------------------------------
# Rank-correlation primitives
# ---------------------------------------------------------------------------
def test_spearman_monotonic_is_one():
xs = [1.0, 2.0, 3.0, 4.0, 5.0]
ys = [10.0, 20.0, 30.0, 40.0, 50.0]
assert bt._spearman(xs, ys) == 1.0
def test_spearman_inverse_is_minus_one():
xs = [1.0, 2.0, 3.0, 4.0, 5.0]
ys = [5.0, 4.0, 3.0, 2.0, 1.0]
assert bt._spearman(xs, ys) == -1.0
def test_spearman_handles_ties_without_crashing():
xs = [1.0, 1.0, 2.0, 2.0, 3.0]
ys = [1.0, 2.0, 2.0, 3.0, 3.0]
ic = bt._spearman(xs, ys)
assert ic is not None and 0.0 < ic <= 1.0
def test_spearman_none_when_degenerate():
# A flat array has zero variance → correlation undefined.
assert bt._spearman([1.0, 1.0, 1.0, 1.0], [1.0, 2.0, 3.0, 4.0]) is None
assert bt._spearman([1.0], [2.0]) is None
def test_quintile_spread_sign_follows_signal():
# signal == fwd return: top quintile clearly beats bottom → positive spread.
pairs = [(float(i), float(i)) for i in range(20)]
spread = bt._quintile_spread(pairs)
assert spread is not None and spread > 0
# Top quintile mean (17,18,19,16) - bottom (0,1,2,3) = 16.0
assert spread == (17 + 18 + 19 + 16) / 4 - (0 + 1 + 2 + 3) / 4
def test_quintile_spread_none_when_too_few():
assert bt._quintile_spread([(1.0, 1.0)] * 9) is None
# ---------------------------------------------------------------------------
# Signal value extraction (point-in-time, price-only)
# ---------------------------------------------------------------------------
def test_signal_values_momentum_and_trend():
# Steadily rising series so every lookback is positive and trend is above SMA.
closes = [100.0 * (1.01 ** k) for k in range(300)]
i = 299
vals = bt._signal_values(closes, closes, i)
assert vals["mom_12_1"] > 0 # up over the 12→1 month window
assert vals["trend_200"] > 0 # price above its 200-bar SMA in an uptrend
# 12-1 momentum skips the last month: close[i-21] / close[i-252] - 1
assert vals["mom_12_1"] == closes[i - 21] / closes[i - 252] - 1.0
# Strictly rising → today IS the 52-week high (highs==closes here) → ratio 1.0
assert vals["high_52w"] == 1.0
assert vals["vol_6m"] > 0 # realized vol is defined and positive
def test_signal_values_drops_signals_without_enough_history():
closes = [100.0 + k for k in range(80)] # only 80 bars
vals = bt._signal_values(closes, closes, 79)
assert "mom_3_1" in vals # needs 63 bars of lookback — present
assert "mom_6_1" not in vals # needs 126 — absent
assert "mom_12_1" not in vals # needs 252 — absent
assert "trend_200" not in vals # needs 200 — absent
assert "high_52w" not in vals # needs 252 — absent
assert "vol_6m" not in vals # needs 126 — absent
# ---------------------------------------------------------------------------
# End-to-end aggregation: a predictive signal scores, noise does not
# ---------------------------------------------------------------------------
def _records(closes: list[float]) -> list[SimpleNamespace]:
start = date(2020, 1, 1)
return [
SimpleNamespace(date=start + timedelta(days=k), close=c, high=c)
for k, c in enumerate(closes)
]
def test_signal_evaluation_separates_edge_from_noise():
rng = random.Random(42)
# Build a synthetic cross-section directly: 30 weeks, 40 names each.
# "edge" perfectly orders the forward return; "noise" is independent of it.
collected: dict = {
"edge": {},
"noise": {},
}
for week in range(30):
edge_recs = []
noise_recs = []
for _ in range(40):
fwd = rng.gauss(0, 0.05)
edge_recs.append((fwd, fwd)) # signal == fwd → IC = 1
noise_recs.append((rng.gauss(0, 1), fwd)) # signal ⟂ fwd → IC ≈ 0
collected["edge"][(2020, week)] = edge_recs
collected["noise"][(2020, week)] = noise_recs
rows = {r["signal"]: r for r in bt._signal_evaluation(collected)}
assert rows["edge"]["mean_ic"] == 1.0
assert rows["edge"]["ic_positive_pct"] == 100.0
assert rows["edge"]["mean_quintile_spread"] > 0
assert abs(rows["noise"]["mean_ic"]) < 0.15 # indistinguishable from zero
# Rows are sorted by mean_ic descending: the real signal ranks first.
assert bt._signal_evaluation(collected)[0]["signal"] == "edge"
def test_signal_evaluation_skips_thin_weeks():
# A week with fewer than MIN_CROSS_SECTION names is ignored entirely.
collected: dict = {"edge": {(2020, 1): [(1.0, 1.0)] * (bt.MIN_CROSS_SECTION - 1)}}
assert bt._signal_evaluation(collected) == []
def test_accumulate_signal_series_emits_weekly_pairs():
closes = [100.0 * (1.005 ** k) for k in range(400)]
collected: dict = {}
from collections import defaultdict
collected = defaultdict(lambda: defaultdict(list))
bt._accumulate_signal_series(_records(closes), collected)
# The long, rising series should yield momentum + trend observations...
assert "mom_12_1" in collected and len(collected["mom_12_1"]) > 0
# ...one per ISO week, with a forward return attached to each pair.
sample = next(iter(collected["mom_12_1"].values()))
assert all(len(pair) == 2 for pair in sample)