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Alan Turing, one of the most brilliant minds to have graced the earth, devised a test to determine whether or not a machine possessed intelligence.  This test became known as the Turing Test.

A pair of researchers have developed a similar test to determine whether humans can tell the difference between actual financial market returns and randomly generated data:

[Jasmina Hasanhodzic and Andew Lo] have devised a simple experiment.

They have created a computer game in which a player is shown two time-series of data. One is real data from a financial market such as the US Dollar Index, or the spot price of Gold. The other is the same data randomly rearranged. The player has to guess which is the real series and is immediately told whether the guess is right or wrong.

They found that very quickly subjects were able to determine what was randomly generated data and what was actual data.  Actual data was much smoother and therefore easy to spot against the bumpy, randomized data.

It is an interesting experiment, but it doesn’t break any ground in terms of human cognition.  We’ve long known that humans seem hardwired to quickly visualize patterns, likely for evolutionary reasons since it is advantageous to quickly recognize predators.  We’ve all experienced the sensation of effortlessly seeing faces or objects in clouds, for example.  This experiment just confirms the notion.