# rrr: Risk-Return Ratio In stocks: Stock Market Analysis

## Description

Calculates risk-return ratio, defined as growth rate divided by maximum drawdown.

## Usage

 `1` ```rrr(prices = NULL, gains = NULL) ```

## Arguments

 `prices` Numeric matrix with 1 column of prices for each investment (can be a vector if there is only one). `gains` Numeric matrix with 1 column of gains for each investment (can be a vector if there is only one).

## Value

Numeric value or vector.

## Examples

 ``` 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19``` ```# Simulate daily gains over a 5-year period set.seed(123) stock.gains <- rnorm(252 * 5, 0.0005, 0.01) # Convert to daily balances assuming an initial balance of \$10,000 daily.balances <- gains_prices(stock.gains + 1) # Total return is about 1.23 daily.balances[length(daily.balances)] / daily.balances[1] - 1 # Maximum drawdown is about 0.19 mdd(prices = daily.balances) # Ratio of these two is about 6.48 (daily.balances[length(daily.balances)] / daily.balances[1] - 1) / mdd(daily.balances) # Easier to calculate using rrr function rrr(daily.balances) ```

stocks documentation built on May 2, 2019, 9:43 a.m.