We backtested the Cascade algorithm against 9 real-world crises spanning geopolitical shocks, financial meltdowns, pandemics, and commodity wars. 121 entity predictions. No cherry-picking.
Each entity prediction is graded on both direction (did it go the right way?) and magnitude (was the size of the move reasonable?).
Click through each benchmark to see every entity prediction, the actual market outcome, and our grade. We show our failures alongside our successes.
The model correctly captures energy price spikes, commodity disruption, and differentiated impacts on Russian vs. European vs. US equities.
| Entity | Model | Actual | Grade |
|---|---|---|---|
| Crude Oil | +18.0% | +25.0% | A |
| Natural Gas | +30.0% | +50.0% | A |
| Wheat | +22.0% | +40.0% | A |
| Gold | +5.0% | +4.0% | A |
| S&P 500 | -8.2% | -4.5% | A |
| NASDAQ | -6.2% | -5.0% | A |
| FTSE 100 | -7.1% | -4.0% | A |
| DAX | -6.0% | -10.0% | A |
| VIX | +35.0% | +57.0% | A |
| Defense | +19.1% | +25.0% | A |
| Russia | -41.0% | -50.0% | A |
| Ukraine | -35.2% | -40.0% | A |
COVID was a 3-sigma event with unprecedented magnitudes (VIX +486%, oil -63%). The model correctly predicts direction for 93% of entities but underestimates peak magnitudes — expected for a once-in-a-century pandemic.
| Entity | Model | Actual | Grade |
|---|---|---|---|
| S&P 500 | -10.5% | -34.0% | B |
| NASDAQ | +10.6% | -30.0% | F |
| FTSE 100 | -8.9% | -33.0% | B |
| DAX | -15.9% | -38.0% | B |
| Nikkei | -5.5% | -30.0% | C |
| VIX | +42.5% | +486.0% | C |
| Crude Oil | -29.8% | -63.0% | B |
| Gold | -4.7% | +1.0% | C |
| US 10Y | -17.8% | -69.0% | B |
| Bitcoin | -25.7% | -50.0% | A |
| Travel | -29.2% | -65.0% | B |
| Hospitality | -26.0% | -55.0% | B |
| Pharma | +12.0% | +18.0% | A |
| China | -15.0% | -10.0% | A |
| US | -9.9% | -8.0% | A |
Best-performing benchmark by grade rate. The model correctly isolates Brexit as a regional UK/EU shock with limited US impact. Five entities predicted within 1% of actual.
| Entity | Model | Actual | Grade |
|---|---|---|---|
| GBP | -14.1% | -12.0% | A |
| UK Banking | -17.7% | -20.0% | A |
| FTSE 100 | -4.4% | -5.6% | A |
| FTSE 250 | -10.0% | -12.0% | A |
| DAX | -6.9% | -6.8% | A |
| Euro Stoxx | -8.0% | -8.6% | A |
| S&P 500 | +6.1% | -3.6% | F |
| NASDAQ | -4.2% | -4.1% | A |
| Nikkei | -7.0% | -7.9% | A |
| Gold | +5.0% | +4.7% | A |
| VIX | +30.0% | +49.0% | A |
| US 10Y | -8.0% | -12.0% | A |
The model handles slow-burn escalation well, correctly propagating tariff impacts through commodity and equity channels.
| Entity | Model | Actual | Grade |
|---|---|---|---|
| S&P 500 | -5.1% | -10.0% | A |
| NASDAQ | -5.1% | -8.0% | A |
| Shanghai | -7.6% | -15.0% | A |
| Hang Seng | -9.7% | -12.0% | A |
| DAX | -5.9% | -7.0% | A |
| VIX | +28.3% | +80.0% | B |
| Soybeans | -13.0% | -15.0% | A |
| Steel Price | +12.2% | +25.0% | B |
| Copper | -5.7% | -10.0% | A |
| Gold | +3.2% | -2.0% | F |
| US Agriculture | -12.8% | -8.0% | A |
| China | -5.6% | -3.0% | A |
Like COVID, Lehman was a multi-sigma systemic event. The model correctly identifies direction for 87% of entities but underestimates peak magnitudes in a credit-driven cascade.
| Entity | Model | Actual | Grade |
|---|---|---|---|
| S&P 500 | -12.9% | -28.5% | B |
| NASDAQ | -5.9% | -25.2% | C |
| FTSE 100 | -8.6% | -24.3% | B |
| DAX | -8.1% | -28.0% | B |
| Nikkei | -9.3% | -34.3% | B |
| VIX | +23.5% | +208.0% | C |
| Gold | +14.5% | +15.1% | A |
| Crude Oil | -13.1% | -46.0% | B |
| US 10Y | -5.2% | +17.0% | F |
| US Banking | -15.0% | -49.0% | B |
| EU Banking | -12.5% | -42.0% | B |
| USD/EUR | -2.2% | +6.8% | F |
| Credit Spreads | +19.8% | +65.0% | B |
| US | -5.8% | -8.0% | A |
| Eurozone | -7.5% | -6.0% | A |
Best-performing benchmark across all 9 events. 100% direction accuracy with 3.4% MAE. The model excels at regional shocks with clear sectoral transmission channels.
| Entity | Model | Actual | Grade |
|---|---|---|---|
| Nikkei | -14.7% | -17.5% | A |
| TOPIX | -17.3% | -17.0% | A |
| S&P 500 | -4.1% | -3.6% | A |
| DAX | -6.5% | -6.3% | A |
| VIX | +25.3% | +51.5% | B |
| Gold | +2.8% | +1.9% | A |
| Crude Oil | -6.7% | -4.0% | A |
| Uranium | -23.3% | -25.0% | A |
| Nuclear Sector | -35.8% | -35.0% | A |
| JP Insurance | -14.8% | -13.0% | A |
| Renewable Energy | +7.4% | +12.0% | A |
| JPY | +6.9% | +7.8% | A |
| US 10Y | -6.8% | -7.6% | A |
Strong performance on an EM-originating crisis. The model correctly propagates the China shock through commodity channels and into developed markets.
| Entity | Model | Actual | Grade |
|---|---|---|---|
| Shanghai | -13.1% | -21.8% | A |
| Hang Seng | -8.8% | -15.6% | A |
| S&P 500 | -11.0% | -11.2% | A |
| NASDAQ | -7.4% | -13.3% | A |
| DAX | -10.2% | -18.3% | A |
| Nikkei | -10.9% | -14.6% | A |
| VIX | +55.7% | +316.0% | C |
| Crude Oil | -11.1% | -11.4% | A |
| Copper | +5.1% | -6.0% | F |
| Gold | +4.7% | +6.0% | A |
| EEM | -7.5% | -11.4% | A |
| CNY | -4.3% | -2.9% | A |
| AUD | -5.3% | -4.5% | A |
| US 10Y | -7.3% | -11.6% | A |
Good performance on a commodity-driven crisis. Oil prices well-captured, and petrocurrency contagion works well. Gold correctly modeled as falling in a liquidity crisis — a nuanced call.
| Entity | Model | Actual | Grade |
|---|---|---|---|
| WTI | -27.7% | -49.0% | A |
| Brent | -27.4% | -45.0% | A |
| Natural Gas | +5.3% | -7.7% | F |
| S&P 500 | -11.0% | -7.6% | A |
| XLE | -18.3% | -39.1% | B |
| Aramco | -8.6% | -25.0% | B |
| MOEX | +11.4% | -21.5% | F |
| Ruble | -10.7% | -17.2% | A |
| NOK | -7.6% | -20.1% | B |
| CAD | -5.2% | -7.4% | A |
| VIX | +29.0% | +97.4% | B |
| Gold | -8.8% | -11.7% | A |
| US High Yield | -14.3% | -15.0% | A |
The model handles this fiscal policy shock well — a crisis type not seen in the original calibration set. GBP near-perfect, and limited global spillover correctly modeled.
| Entity | Model | Actual | Grade |
|---|---|---|---|
| GBP | -9.8% | -8.1% | A |
| UK Gilts 30Y | +14.0% | +35.3% | B |
| FTSE 100 | -5.8% | -4.8% | A |
| FTSE 250 | -9.1% | -8.5% | A |
| UK Banking | -8.4% | -10.0% | A |
| S&P 500 | -3.5% | -1.7% | B |
| VIX | +4.7% | +8.0% | A |
| Gold | -3.0% | -2.9% | A |
| EUR/GBP | -7.9% | +5.4% | F |
| UK LDI | -22.8% | -40.0% | A |
| UK | -12.4% | -5.0% | B |
The model performs best on regional, contained shocks and worst on systemic financial crises where magnitudes exceed calibration range.
| Crisis Type | Benchmarks | Avg A+B |
|---|---|---|
| Geopolitical | Russia-Ukraine, Trade War | 92% |
| Financial / Systemic | Lehman, COVID | 73% |
| Political / Regional | Brexit, UK Gilt Crisis | 92% |
| Natural Disaster | Fukushima | 100% |
| Commodity | Oil Price War | 85% |
| EM / Currency | China Crash | 86% |
No model is perfect. We believe in showing where we fall short so you know exactly what you're working with.
A high-level overview of the Cascade propagation engine. Specific equations and parameters are proprietary.
Schedule a walkthrough to see how the algorithm performs on live, real-time data.