Learn Risk and return
Read growth, variability and losses separately, with consistent periods and calculation conventions.
What you will learn
Growth, return variability and peak-to-trough losses answer different questions. Before ranking results by a metric, identify its inputs, cost treatment and observation window.
Follow the sequence below from definitions to input checks and public lessons. Distinguish numerical illustrations from actual run results.
Growth and losses
CAGR: separate compound growth from the path of lossesCalculate compound annual growth with fictional values and no external cash flows.What is maximum drawdown? Measuring the fall from a portfolio peakLearn how maximum drawdown is calculated and how to read an underwater chart using a short portfolio-value example.
Understand variability
Volatility: align return frequency and standard-deviation conventionsCalculate fictional daily volatility with explicit ddof and annualization assumptions.What Is the Sharpe Ratio? Why the Number Alone Is Not EnoughUnderstand excess returns, volatility, sampling frequency and annualization, and learn why a Sharpe ratio needs context before comparison.Sortino ratio: define the target and downside denominatorUse fictional monthly observations to define target shortfall and the full-sample denominator.
Check a report
Read Backtest Results: Separate Returns, Risk and TradingRead reports in order: input identity, equity, drawdowns, fees, orders and position cycles, with explicit metric conventions.Portfolio concentration: holdings, largest weight and HHICalculate concentration with fictional weights and check the treatment of cash.Price return and total return: check the benchmark basisUse a fictional dividend example to distinguish price return from total return.
Explore connected topics
Applies to: main source candidate (unpublished) · Public source docs/en_US/GUI_RESEARCH_COURSES.md
Reviewed · KabuForge