Calmar Ratio

What Does Calmar Ratio Mean?
A ratio used to determine return relative to drawdown (downside) risk in a hedge fund.

Calculated as:

Investopedia explains Calmar Ratio
Generally speaking, the higher the Calmar ratio, the better. Some funds have high annual returns, but they also have extremely high drawdown risk. This ratio helps determine return on a downside risk-adjusted basis. Most people use data from the past three years.

Related Terms

Compound Annual Growth Rate - CAGR
Drawdown
Hedge Fund
Sterling Ratio
More Related Terms

Related Links

A Brief History Of The Hedge Fund - Find out how this U.S.-born investment innovation became a $1-trillion industry that's both praised and vilified by the media.
Special Feature: Mutual Funds - Mutual funds are an inexpensive and easy way to benefit from diversification and professional management. See our mutual fund feature for everything you need to know.
Hedge Funds Hunt For Upside, Regardless Of The Market - Hedge funds seek positive absolute returns, and engage in aggressive strategies to make this happen.
Hedge Funds: Higher Returns Or Just High Fees? - Discover the advantages and pitfalls of hedge funds and the questions to ask when choosing one.
Do hedge funds and mutual funds invest in commodities in high inflation environments?

Rate this Term: Your Rating: Overall Rating: Vote Now!