Portfolio Risk Metrics

Learn how to measure and interpret key risk metrics for your trading portfolio.

Return Metrics

Total Return

The overall gain or loss on your portfolio.

Total Return = (Ending Value - Beginning Value) / Beginning Value × 100

CAGR (Compound Annual Growth Rate)

Annualized return accounting for compounding.

Risk-Adjusted Returns

Returns normalized for the amount of risk taken.

Volatility Metrics

Standard Deviation

Measures the dispersion of returns around the mean.

• Low (< 10%): Conservative
• Medium (10-20%): Moderate
• High (> 20%): Aggressive

Beta

Measures sensitivity to market movements.

• β = 1: Moves with the market
• β > 1: More volatile than market
• β < 1: Less volatile than market

Risk Ratios

Sharpe Ratio

Risk-adjusted return measure.

Sharpe = (Return - Risk-Free Rate) / Standard Deviation

• < 1: Poor
• 1-2: Good

• 2: Excellent

Sortino Ratio

Similar to Sharpe but only considers downside volatility.

Calmar Ratio

Return divided by maximum drawdown.

Drawdown Analysis

Maximum Drawdown

Largest peak-to-trough decline.

Average Drawdown

Mean of all drawdowns.

Recovery Time

Time to recover from drawdowns.

Using Metrics in Neura AI

The platform automatically calculates:

• Real-time portfolio metrics
• Historical performance analysis
• Risk attribution
• Peer comparison

Interpreting Your Dashboard

Neura AI color-codes risk levels:

• 🟢 Green: Healthy
• 🟡 Yellow: Caution
• 🔴 Red: High risk