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Lab · 6 min · No account

Measure a drawdown

A drawdown is how far a portfolio falls below the highest value it had reached. Drag the crash depth and watch the shaded area under the demo curve: it is the distance below the running peak.

Max drawdown: −25%

Demo data

Take a portfolio that peaks at 100 and later falls to 75. The drawdown is (100 − 75) ÷ 100 = 25%. It stays 25% until the portfolio climbs back above 100, whatever happens in between.

drawdown=peak−valuepeak\text{drawdown} = \frac{\text{peak} - \text{value}}{\text{peak}}

Exercise

A demo portfolio peaks at 12,345 and falls to 9,876. How deep is the drawdown, in percent?

Where you see it in Fincanva → What every number in Performance Metrics means

Fincanva is for education and illustration only. It is not personalised financial advice, and past or simulated results do not predict future ones. Read the Terms Addendum

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