The prior adjustment (pre-adjustment) for backtesting differs between domestic and international markets.
A few days ago, someone asked me using the pre-adjusted prices of very early Kweichow Moutai stock. Honestly, I was taken aback at first glance: Looking at the “pre-adjustment” values, Yahoo had no negative numbers, while East Money showed negative numbers. When I later reviewed my article from June, titled Detailed Explanation of ‘Adjustment’ and Data Acquisition in Backtesting, I realized that I had mixed up several things. At the time, I presented the “ratio method” as if it were the single standard, but pre-adjustment in the domestic A-share context and the commonly used adjusted close for Hong Kong/US stocks are fundamentally different metrics.
This article only does one thing: separate these two metrics/standards. I will put my judgment first so that you don’t get confused later: The pre-adjustment (or forward adjustment) of leading domestic apps is more like leveling the candlesticks by following the exchange’s ex-rights/ex-dividend reference price; the commonly used international adjusted close is more like using a cumulative multiplier to express the total return from “reinvesting dividends.” They are both called pre-adjustment, but they answer different questions.