CDO modeling based on past performance: Is it possible?

The article discusses the findings of Wachovia Securities LLC collateralized debt obligation (CDO) analysts about the method to project future performance of new-issue CDO using historical data. The risk adjusted return would provide values on how well the securities would fare based on the assumption that their performance is identical to historical averages. However, judging the future behavior of CDO based on past deals can be tricky due to constant structural and collateral changes.