Finance & Trading

Your backtest incorporates data the model could not have seen at decision time. The 20-day moving average that includes future prices is indistinguishable from one that does not, because the model processes all context tokens simultaneously. Temporal leakage is invisible until production losses surface it.

One API call forces your model to verify temporal direction before accepting any causal claim from market data. Lookahead bias becomes structurally impossible.

• 01

  The Pattern

  Correlated features accepted as causal signals in factor models, contaminating risk attribution

  Why It Happens

  Statistical co-occurrence in training data is indistinguishable from causation without an explicit causal graph. The model has no mechanism to test whether a relationship is directional or coincidental.

  The Resolution

  CA-007Bayesian Updater

  Enforces explicit prior-to-posterior updates on every evidence review. The model cannot anchor on initial estimates or treat statistical association as causal proof.

  Supported byCA-015 Data Skeptic
• 02

  The Pattern

  Backtests silently incorporate future data via temporal leakage in the reasoning chain

  Why It Happens

  The model processes all context tokens simultaneously. It has no internal clock separating "data available at decision time" from "data available after." Temporal ordering must be enforced externally.

  The Resolution

  TE-003Causality Enforcer

  Blocks any causal claim where the effect precedes the cause in the timeline. No indicator can be treated as leading if it follows the event it supposedly predicts.

  Supported byTE-001 Temporal Auditor
• 03

  The Pattern

  Risk factor correlations estimated during calm markets applied unchanged during crises, when correlations converge toward 1.0 and diversification collapses

  Why It Happens

  Correlation matrices are estimated from historical windows that overrepresent normal conditions. The model treats the estimated matrix as stable, but correlation is non-stationary: under stress, asset classes that appeared independent become tightly coupled.

  The Resolution

  SI-004Monte Carlo Resilience Tester

  Stress-tests portfolio correlation assumptions under crisis scenarios, exposing the gap between calm-market diversification estimates and stressed-market co-movement.

  Supported bySI-027 Regime Shift Discriminator

Financial evaluations have strict temporal boundaries with single correct answers. A single scaffold that enforces chronological isolation outperforms four competing perspectives that debate direction.

Scaffold value compounds with task length. Measured on ARC-AGI-3: scaffold half-life of 24 steps, reasoning quality improving (+0.014 slope) instead of degrading (-0.005 baseline).