NeuroStrategy FAQ
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The charts of NeuroStrategy's Model Builder represent equity developments. The display can be switched between absolute and logarithmic scaling. For a better overview, all of the charts shown here use the logarithmic representation.
The red curve describes a buy/hold strategy. Hence, the course of this curve answers the question: how would our investment have developed from the beginning to the end of the represented time period without additional intervention? This curve corresponds exactly to the price curve of the relevant security. The only difference is that the representation of currency and price is independent, since the curve illustrates the daily percent deviations (daily returns).
The dashed red line is the regression line of this curve. In its calculation, a straight line is superimposed onto the original curve in such a way that all of the data points of the original curve lie as near as possible to the straight line. The line of regression thus illustrates the overall trend of the data series.
The blue curve in the Builder chart shows the equity development of the represented strategy model - taking into consideration only the returns from investments into the security that is being studied. That is to say: the returns from the risk-free investments are not taken into account. We decided in favor of this representation in order to give a picture of the strategy pursued that is as realistic as possible. If the risk-free returns were also taken into consideration, the blue line would be more uniform and steeper.
The dashed blue line again is a regression line, in this case, the regression line corresponding to the equity curve of the model.
The dashed black line finally shows the equity development exclusively for the risk-free returns. The equity curve of the model should never fall below this line.
In the analysis panel in the lower section of the chart, you will find various types of statistical information, which can help you in your evaluation of the strategy's performance.
By means of a switch, the Model Builder offers another version of the chart. An understanding and analysis of the detail panel of these Builder charts is not essential for a successful use of the system. The graphical representations in this chart present views of parts of the artificial intelligence system at the basis of the application. Thus, the percentages in the left section of the representation show how the system has weighted the various inputs. The processing section on the right provides insight into how the system uses the available resources. Under a nondisclosure agreement, Ivorix is able to reveal the inputs used to client.
