You should use different data sets to estimate and validate your model for best validation results.
In the System Identification app, Working Data refers to estimation data. Similarly, Validation Data refers to the data set you use to validate a model. For example, when you plot the model output, the input to the model is the input signal from the validation data set. This plot compares model output to the measured output in the validation data set. Selecting Model resids performs residual analysis using the validation data.
To specify Working Data, drag and drop the corresponding data icon into the Working Data rectangle, as shown in the following figure. Similarly, to specify Validation Data, drag and drop the corresponding data icon into the Validation Data rectangle. Alternatively, right-click the icon to open the Data/model Info dialog box. Select the Use as Working Data or Use as Validation Data and click Apply to specify estimation and validation data, respectively.