Can You Beat Random Numbers?

As an experiment, I’ve been submitting random numbers between 0 and 1 for all the available tickers. The model is called ‘Jersey Devil’ and is currently ranked 71 for corr 20 as of round 278 with one more day to go.

I’m not staking on this model (just the minimum .01 to see returns). I use it solely as a baseline for my other models. If they can’t beat random numbers, they die. Yes it hurts when you put a lot of time and effort into a model and it doesn’t do better than random numbers :laughing:.

I was pretty surprised this has positive corr at all but we’ll have to see if that continues in the future. Here is a colab notebook with the exact code.

Jersey Devil vs My Current Best Model


This would be a perfect demonstration case of the effects of neutralization. Reporting pre- and post neutralized scores would be highly informative.


My ego could never survive this. :slight_smile:


An interesting experiment, thanks for sharing! This is not surprising on second thoughts. A randomly selected portfolio of stocks often performs quite well, especially in long bull runs. From memory there are some studies showing that it handily beats most fund managers. Whether a random portfolio could also beat a hedge fund with great data… I suspect no self-respecting hedge fund would submit to that test.