VALIDATE / OVERFIT RISK

The in-sample winner can become weak after selection.

PBO studies candidate behaviour across partitions and estimates whether the selection procedure rewards a random peak.

Launch research Explore the details ↓

SYSTEM DOMAIN03 / VALIDATE

Challenge the candidate before risk

DISCOVER
OPTIMIZE
VALIDATE
RUN
OBSERVE

Candidate set

The metric requires a history of comparable variants rather than one published winner.

Partitions

In-sample ranks are compared with out-of-sample behaviour for the same variants.

Selection risk

High PBO signals that the space or economic mechanism needs revision.

Not loss probability

PBO estimates procedure overfitting, not the probability of a future losing trade.

DECISION FRAMEWORK

Which independent test could still reject the candidate?

Treat holdout, time stability, multiple-testing correction and stress paths as separate evidence. Agreement matters more than one green metric.

Protect unseen data

Record every trial

Accept FAIL and insufficient data

OUTPUT

Validation verdict

Important

Historical, statistical and model results do not promise future returns. kquant provides computational tools and technical execution, but does not assess whether a specific trade is suitable for a user.