Imagine you're at a quantitative hedge fund and you're tasked with backtesting a simple momentum trading strategy based on monthly stock returns. The core idea is to long a portfolio of stocks that performed best over the past 12 months and short a portfolio of stocks that performed worst, with monthly rebalancing. Walk me through how you would design and execute this backtest, covering data preparation, defining strategy rules, risk management, performance evaluation, and potential challenges and their solutions.

你正在为一家量化对冲基金工作，被要求回测一个基于股票月度收益的简单动量交易策略。该策略的核心思想是买入过去12个月表现最好的股票组合（多头），卖出表现最差的股票组合（空头），并每月进行调整。请你详细阐述将如何设计和执行这项回测，包括数据准备、策略规则定义、风险管理、性能评估以及可能遇到的挑战和解决方案。