Published 2026-10-14
Survivorship bias
Survivorship bias is the distortion that appears when a dataset only contains the things that survived — delisted stocks vanish from history, so a backtest over them looks better than the market actually was.
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What it is
Survivorship bias is the distortion that appears when a dataset only contains the things that survived.
In markets: delisted companies vanish from historical data. A backtest run over “all stocks” that quietly excludes the ones that went to zero is testing a market that never existed.
Why it matters
It makes results look better in a way that is invisible unless you look for it. The failures are missing — and the failures are the point.
How to check
Ask: does this dataset include delisted instruments?
If the answer is no, or if nobody has asked, the result carries an unquantified upward bias.