> For the complete documentation index, see [llms.txt](https://docs.candelacharts.com/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.candelacharts.com/investing/risk-adjusted-performance/calmar-ratio.md). # Calmar Ratio The **Calmar Ratio** is a specialized risk-adjusted performance indicator that provides a rigorous assessment of an asset's efficiency by comparing its annualized growth (CAGR) directly to its maximum historical drawdown. Unlike traditional metrics like the Sharpe Ratio, which can penalize positive volatility, the Calmar Ratio focuses exclusively on downside risk—tracking the "pain" an investor must endure to achieve a specific level of return. This makes it an invaluable tool for professional traders and portfolio managers who prioritize capital preservation and seek to identify strategies that deliver robust performance without exposing capital to excessive peak-to-trough declines. --- # Agent Instructions This documentation is published with GitBook. GitBook is the documentation platform designed so that both humans and AI agents can read, navigate, and reason over technical content effectively. Learn more at gitbook.com. ## Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter, and the optional `goal` query parameter: ``` GET https://docs.candelacharts.com/investing/risk-adjusted-performance/calmar-ratio.md?ask=&goal= ``` `ask` is the immediate question: it should be specific, self-contained, and written in natural language. `goal` is optional and describes the broader end goal you are ultimately trying to accomplish on behalf of the user. GitBook uses it to tailor the answer towards what is most useful for that goal. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.