Data Science Interview Questions Part 1
What is look ahead bias? How to avoid it?
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Simply put, Bias is any tendency that causes a drift between results and facts. This can be introducing while collecting, sampling or processing data.
Look ahead bias occurs when a system depends on information that was not available at the time of the study.
To explain it as an illustration, it is simply putting future information to an experiment set in a previous timeframe.
Look ahead bias occurs a lot in the finance industry when designing trading strategies.
Analysts design the model so it favors the real outcomes of those stocks they know now, which certainly won't be available for the model in practise.
How to prevent this?
Two ways, Rolling window or Expanding window