Capture Ratio
The capture ratio helps investors evaluate how well an asset or portfolio performs during both rising and falling markets. The ratio is calculated by comparing the asset's performance to a benchmark index during up and down markets. - Up Market Capture Ratio: Measures how well an asset performs during periods when the market is rising. - Formula: Up Market Capture Ratio = (Returns during market highs / Benchmark returns) * 100. - Down Market Capture Ratio: Measures how well an asset performs when the market is falling. - Formula: Down Market Capture Ratio = (Returns during market lows / Benchmark returns) * 100. These ratios help assess if the asset manager is effectively navigating market volatility.
Related Terms
Iceberg Order
An Iceberg Order is a trading strategy used to break down large orders into smaller...
Fibonacci Retracement
A Fibonacci Retracement is a predictive technical indicator used to forecast potential price reversals or...
Commodity Spread Straddle
A commodity straddle is an options trading strategy where a trader buys both a call...
Demat Account
A Dematerialized (Demat) account is an electronic account used to store shares, exchange-traded funds (ETFs),...
Adjusted Closing Price
The adjusted closing price of a stock reflects modifications made to account for corporate actions—such...
Leverage In Stock Market
Leverage is a loan provided by a broker, enabling traders to hold larger positions with...
