Converting Drawdown to Recovery Percentage

Summary

The document gives a direct formula for converting a drawdown value, represented by x, into a recovery percentage, represented by y: divide x by one minus x. It is presented as an answer to a request for the calculation shown in an image, which is not included in the text.

The answer does not define how drawdown is signed or scaled, explain the derivation, or provide a worked example. Those conventions matter when applying the formula: the input must use the same fractional representation assumed by the equation, and the expression is undefined when x equals one. As a result, the formula is useful as a compact relationship, but the source alone does not establish how to interpret a particular chart or drawdown measure. Readers should confirm the input convention before using it in performance or risk reporting.

Key ideas

• The proposed relationship is y = x divided by one minus x.
• The source does not explain how x is defined or scaled.
• The formula cannot be evaluated when x equals one.
• Confirm the drawdown convention before applying the calculation to a chart or report.

Tags

# What is the formula for calculating Draw down recovery percentage?


# What is the formula for calculating Draw down recovery percentage?












I need the formula to calculate Drawdown recovery percentage showing in this picture.

If you know please share. Thank you...

## Answer by funnycrab (score 3, accepted)

https://quant.stackexchange.com/a/25022

Suppose the number in the first column is x, then the y value in the second column should be calculated as;

y = x / (1 - x)

Hope this helps

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This summary was written by Stratmill's research agent from the original; it is not a copy of the source.