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I define the Gain to Pain ratio (GPR) as the sum of all monthly returns divided by the absolute value of the sum of all monthly losses. This performance measure indicates the ratio of cumulative net gain to the cumulative loss realized to achieve that gain.
The Pain Ratio provides a better assessment for understanding the amount of return per unit of risk, measured in terms of capital preservation. There are many variations to the basic return-divided-by risk concept, like Sharpe ratio, Treynor ratio, Sortino ratio, information ratio and many others.
The Pain Ratio provides a better assessment for understanding the amount of return per unit of risk, measured in terms of capital preservation. There are many variations to the basic return-divided-by risk concept, like Sharpe ratio, Treynor ratio, Sortino ratio, information ratio and many others.
The Gain to Pain Ratio (GPR) measures investment performance by dividing the sum of total gains by the absolute sum of total losses for the same period. GPR helps traders and investors assess strategy performance.
The Pain Ratio is a metric that evaluates the balance between the upside potential (reward) and the downside risk (pain) of an investment. It acknowledges that not all gains are created equal and that the emotional toll of losses can significantly impact an investor's well-being.
The gain-to-pain ratio (GPR) is a popular formula used to compare the sum of gains achieved with the pain/loss an investor suffers. It is used mainly in project management, trading, and financial management. The sole purpose of this formula is to assess the risk-reward tradeoff for a particular investment.
The Gain to Pain ratio, which as I defined my book is the sum of all monthly returns divided by the absolute value of the sum of only the monthly losses, is an excellent metric for comparing managers.
What Is the Pain Ratio? The Pain Ratio is a metric that evaluates the downside risk associated with an investment. Unlike traditional risk measures that focus solely on volatility, the Pain Ratio considers the magnitude and duration of losses.
The Gain to Pain ratio (also known as the RPR – Reward to Pain ratio) is a risk-adjusted performance measure that evaluates the return of a portfolio relative to the drawdown or “pain” experienced by the portfolio.
One of them is the “Pain to Gain” ratio. Recently on the Financial Planning website, Craig Israelsen explained this formula. It divides the standard deviation of return by the actual return.