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BUG? Corporate Action HPE spin-off to DXC and backtesting
Richard Prokopyshen
posted Apr 6, 2017

On Friday 31Mar2017, HPE closed at $23.70. On Monday 03Apr, it opened at $18.00 - a drop of more then 20% - due to a corporate action.

Per the announcement: With the close of the transaction, HPE stockholders received approximately 0.086 shares of common stock in the new company [DXC Technology Co COM] for each share of HPE common stock that they held since the applicable record date [March 20, 2017].

The attached backtest doesnt seem to handle this correctly. After the Corporate Action, I dont see any shares of DXC in my portfolio.

Is the backtester designed to model spin-off's like this one?

3 responses
Ernesto Perez
Apr 10, 2017

Hi Richard,

The backtester can simulate spin-offs, but the platform does not automatically pick up these events. I have created a report for our team to review, so that the event can be added to our database.

After the event is added to the platform, the backtester should simulate the event by adding shares of DXC to your portfolio as per the announcement.

Thanks for reporting this!

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Richard Prokopyshen
Jun 28, 2017

Hello Ernesto -

Any update on this? Is it typical for Corporate Events to take this long to get entered?

Thanks,Richard.

Ernesto Perez
Jul 29, 2017

Hello Richard,

The corporate event is now being handled properly by the backtester.

Sorry for the delay, it was an error on my end.

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The material on this website is provided for informational purposes only and does not constitute an offer to sell, a solicitation to buy, or a recommendation or endorsement for any security or strategy, nor does it constitute an offer to provide investment advisory services by Quantopian.

In addition, the material offers no opinion with respect to the suitability of any security or specific investment. No information contained herein should be regarded as a suggestion to engage in or refrain from any investment-related course of action as none of Quantopian nor any of its affiliates is undertaking to provide investment advice, act as an adviser to any plan or entity subject to the Employee Retirement Income Security Act of 1974, as amended, individual retirement account or individual retirement annuity, or give advice in a fiduciary capacity with respect to the materials presented herein. If you are an individual retirement or other investor, contact your financial advisor or other fiduciary unrelated to Quantopian about whether any given investment idea, strategy, product or service described herein may be appropriate for your circumstances. All investments involve risk, including loss of principal. Quantopian makes no guarantees as to the accuracy or completeness of the views expressed in the website. The views are subject to change, and may have become unreliable for various reasons, including changes in market conditions or economic circumstances.