Longest recovery is the longest stretch of time a strategy took to climb from a trough back to its prior peak — the count starts at the bottom of a fall and ends when the value reaches the old high again. It answers "once it had stopped falling, how long did getting back take?", and it is measured from the bottom, not from the peak.
Also seen as: recovery time, time to get back to the high
How is longest recovery different from longest drawdown?
Longest recovery covers only the climb back up; longest drawdown covers the fall and the climb. Both end at the same moment — the return to the old peak — but they start in different places, which is why the same episode produces two different numbers.
| Measure | Starts at | Ends at |
|---|---|---|
| Longest drawdown | the old peak, when the value first drops below it | the moment the value reaches that old peak again |
| Longest recovery | the trough, the lowest point of the fall | the moment the value reaches that old peak again |
For a single episode, longest recovery is therefore the shorter of the two. Confusing them is the most common mistake with this pair: a "9-month recovery" and a "14-month drawdown" can be the same event, seen from the bottom and from the top.
Defaults in Fincanva
- The metrics table shows it in the Drawdown group as the row Longest recovery (months).
- It uses the same duration format as longest drawdown — a bare one-decimal number for 12 months or fewer,
2yfor exact years,1y 2motherwise. See how these durations are displayed. - Unlike longest drawdown, longest recovery appears in the metrics table only — it has no KPI card on the metrics view.
- It is measured over the whole backtest window, so it is not comparable across runs of different lengths.
Worked example
A strategy peaks, falls for five months to its trough, then takes nine months to climb from that trough back to the old peak. Its longest recovery for the episode is 9 months.
The same episode's longest drawdown is 14 months — the five months of falling plus the nine months of climbing. Same event, two figures: 9 months of recovery sits inside 14 months below the peak.
What counts as a good value?
A shorter longest recovery means that, once a fall had bottomed out, the strategy needed less time to get back to its previous high. Like longest drawdown it describes duration only: it says nothing about how far the value fell, which is max drawdown, nor how much return the strategy earned for that worst fall, which is the return-to-drawdown ratio.
A shallow fall can still take a long time to recover, and a deep fall can be undone quickly — the pairing of depth and duration is what the two readings together describe, and neither one ranks strategies on its own.
These figures describe what a strategy would have done on historical data, not what it will do. Fincanva provides no financial advice — see Is this financial advice?.
Where this term is used
Generated · 2 pagesThe pages that reference this term — so a term page is somewhere you pass through, not somewhere you land and stop.
Also referenced by 3 terms
Fincanva provides no financial advice. Backtests show what would have happened — not what will.
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