Understand the path behind the return.

Drawdown needs a running peak

At each observation, compare the value with the highest value observed so far. The drawdown is current value divided by that running peak, minus one. The most negative observation is the maximum drawdown within that sampled path.

A monthly series can miss a deeper loss that occurred between month-end observations. Always name the frequency, date range, and data scope. Our sample charts calculate only what their displayed observations support.

Recovery is not a symmetric percentage

A decline from 100 to 80 is a 20% loss. Returning from 80 to 100 requires a 25% gain because the denominator changed. These are arithmetic descriptions, not assumptions about when or whether a recovery occurs.

The drawdown and volatility guide explains this distinction and the separate question of time below a prior peak.

Volatility depends on convention

Specify whether the inputs are simple or logarithmic returns, how frequently they are measured, and which standard-deviation convention is used. Any annualization adds assumptions that should be visible. A single annualized figure can obscure a changing underlying sample.

Volatility alone does not capture every concern, including liquidity, concentration, counterparty exposure, or the possibility that the historical sample excludes relevant conditions. It is one measurement, not a complete risk assessment.

Keep costs and comparisons aligned

Transaction costs and other deductions change the result available to an investor. A gross result compared with a net result may answer a different question than the reader expects. Show the convention rather than relying on a short label such as “performance.”

Pair this page with portfolio alpha, the benchmarking guide, and the site’s risk information before interpreting any example as a decision input.