Note: Past performance is not a reliable indicator of future performance. The performance shown is provided solely for transparency and does not constitute a forecast or a recommendation to buy or sell financial instruments.
Performance describes the strategy’s development over different periods and how much its value has risen or fallen during the selected timeframe.
Since capital markets can be subject to strong short-term fluctuations, short-term developments—for example, one-year performance—should not be viewed in isolation. For assessing a long-term equity strategy, multi-year periods are far more meaningful.
This metric shows the overall performance of the UMBRELLA strategy since its inception on Wikifolio on 2012-09-16.
It illustrates how the UMBRELLA strategy would have developed over the entire observation period and represents the long-term evaluation potential of this strategy as well as a comparison with other successful strategies.
Long-term data is often more meaningful than short-term results, as it accounts for various market phases—including both upswings and corrections.
The average annual performance shows the average percentage change in value the strategy has achieved per year.
Unlike a simple average, this figure takes the compound interest effect into account and thus describes the actual long-term growth of the UMBRELLA strategy.
In general, the higher this value, the stronger a portfolio developed over the entire period.
Volatility measures the intensity of a strategy’s price fluctuations and is considered an important measure of risk.
High volatility means that prices fluctuate more sharply, while low volatility represents a steadier price trend.
It is important to note: High volatility does not automatically mean a bad strategy. Growth-oriented equity strategies often exhibit higher fluctuations than defensive investment strategies.
Volatility therefore does not describe returns, but solely the intensity of price fluctuations. Volatility is often the price of performance—you have to be able to withstand it.
The Sharpe Ratio is one of the most important metrics for evaluation.
It measures how much return was achieved in relation to the total risk taken. Put simply, it answers the question: How efficiently was risk converted into return?
The higher the Sharpe Ratio, the better the relationship between the return achieved and the risk taken. The following serve as a guide:
The Sortino Ratio is a further development of the Sharpe Ratio.
While the Sharpe Ratio considers all price fluctuations—both positive and negative—the Sortino Ratio exclusively looks at negative fluctuations, i.e., those price movements that actually represent a risk.
As a result, it often provides an even more realistic picture of the quality of an investment strategy. The higher the Sortino Ratio, the better the relationship between the return achieved and the actual risk of loss incurred.
The risk-reward ratio describes how efficiently the risk taken has been converted into long-term returns.
It combines return and risk into an easy-to-understand figure and facilitates the comparison of different strategies.
Generally speaking:
A successful strategy in the financial markets is not characterized solely by high returns. Equally decisive is the level of risk taken to achieve those returns.
It should be noted that success or failure in the stock market always depends on the individual perspective of the person observing it. While some prioritize the highest possible return, others place greater value on low volatility, a limited maximum loss, or the most consistent performance possible.
The presented key figures provide an objective basis for comparing strategies in terms of return and risk. Only the interplay of these key figures allows for a well-founded assessment of the quality, stability, and efficiency of long-term strategies in the stock markets.
The linear view shows absolute performance and illustrates the impact of gains and declines in concrete points. However, over long observation periods, recent developments often dominate because the same percentage movement appears significantly larger at a higher starting value.
The logarithmic view compensates for this effect: identical percentage changes are displayed with a comparable slope, regardless of the respective price level. This allows for a better comparison of growth phases, trend reversals, and pullbacks across different market phases. Especially for assets that have seen significant growth, the logarithmic representation provides a more meaningful picture of relative performance and prevents early price movements from being visually lost.
At the very top of the chart, use the option to switch between logarithmic and linear view.
