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The risk-return ratio is a measure of return in terms of risk for a specific time period. The percentage return for the time period is measured in a straightforward way:
where P s t a r t {\displaystyle P_{start}} and P e n d {\displaystyle P_{end}} simply refer to the price by the start and end of the time period.
The risk is measured as the percentage maximum drawdown for the specific period:
where DDt, DDt-1, Pt and Pt-1 refer the drawdown and prices at a specific point in time, t, or the time right before that, t-1.
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