Beta Hog

In Search of Low (or Negative) Correlation Between Asset Returns

Your philosophical inference concerning "forward-looking information" is quite correct in that it is a pre-judgement of the anticipated future. And it will almost certainly prove to be "wrong" in some measure. And if it isn't wrong, that will be pure "luck" and nothing more. All 'forward-looking data' carries probalistic uncertainty of some amount that cannot be quantified in advance with a high degree of precision. Such forward inputs are based on an extension of the past in any event since they are not usually conceived in a vacuum. The strength of using only historical numbers is that they are not open to dispute. Statements that past returns can not be used to generate superior risk-adjusted future returns are not a proof of anything, but merely represent the 'opinion' of the person making the claim.