I am using a quant simulation platform and I have chosen a formulaic alpha to be used. Now the platform is backtesting and displaying the total return of the alpha strategy over 12 years. The trading window chosen can be 1 hour or 1 day.
The initial value of my portfolio was some 2.7 units and value at the end of 12 years was some 4 units. Now how is this total return over 12 years generally calculated ? It's not explicitly written on the platform but how is it generally done ? I guess my alpha strategy is being used to get weights for individual stocks to construct an initial portfolio. What happens after this ? Is the value of the same portfolio checked after 12 hours and the return is calculated or is something else being done to calculate the total return ?
P.S: The platform is very new and does not have this information explicitly written, so how is this generally done everywhere ?