What are some tips for running meaningful simulations in Fincanva?

Running meaningful simulations in Fincanva helps you gain deeper insights into your investment strategy’s strengths and weaknesses. To get the most out of your simulations, it's important to set them up thoughtfully and analyze the results from multiple angles.

• Simulate across different time periods: Test your strategy during various market conditions—e.g., the 2008 financial crisis or the 2020 pandemic—to see how it performs under stress.

• Use benchmarks for comparison: Compare your portfolio to relevant indices or sectors to evaluate relative performance and risk-adjusted returns.

• Include real-world frictions: Enable costs, taxes, and reinvestment options to ensure your simulations reflect realistic returns.

• Use the Start Date Sensitivity tab (if available): This helps you understand how sensitive your strategy’s performance is to different starting points.

• Experiment with different scenarios: Adjust settings like capital, risk rules, allocation methods, or asset universe to explore how your strategy adapts.

• Check for overfitting: Avoid tweaking your strategy too much based on one simulation. Make sure it generalizes well across time and conditions.

• Monitor drawdowns and volatility: Don’t just look at total return. Pay close attention to how much the portfolio drops during bad periods and how stable the returns are.

• Analyze model contributions: Use the Models Analytics tab to see which models drive performance and how they correlate.

• Balance complexity with clarity: More models and rules don’t always mean better results. Keep simulations manageable and interpretable.

• Document your changes: Keep notes on what you tested and why. This makes it easier to iterate thoughtfully and avoid repeating mistakes.

By applying these tips, you’ll turn each simulation into a powerful learning tool and build stronger, more reliable investment strategies.