Free Maximum Drawdown Calculator
Measure the Largest Drop in Your Investment
The Maximum Drawdown Calculator allows investors to determine the largest peak-to-trough decline in a portfolio or investment over a specific period. By analyzing historical performance, this tool highlights the most significant loss experienced before a recovery, helping you understand the potential risk in your investments. Knowing your maximum drawdown helps in portfolio planning, risk management, and setting realistic expectations for investment performance. Suitable for both beginners and seasoned investors, this calculator provides a clear and simple method to visualize downside risk and strengthen your investment strategy.
Maximum Drawdown Calculator
Calculate the largest peak-to-trough decline of an investment.
Calculation Results
Maximum Drawdown
$0.00
Maximum Drawdown Percentage
0.00%
Detailed Breakdown
Maximum Drawdown Calculator Guide
The Formula We Use
Drawdown at time t = Current value minus Running peak divided by Running peakMaximum Drawdown percent = The most negative drawdown value times 100Running peakmeans the highest portfolio value seen so farTroughmeans the lowest value after a peak before a new peak is reached
Example Calculation
- Drawdown at trough = 90 minus 120 divided by 120 = minus 0.25
- Maximum Drawdown percent = 0.25 times 100 = 25 percent
- This means the largest drop from a prior peak was twenty five percent before a full recovery
How to Use This Calculator
- Enter a series of portfolio values or prices for the chosen period such as daily or monthly.
- The tool tracks the running peak and computes drawdown at each point.
- It finds the most negative drawdown and reports it in percent terms.
- Optionally record the dates of peak and trough to see when the worst loss occurred.
Tips for Better Interpretation
- Use enough history: long samples reveal deeper worst case losses.
- Pair with recovery time: note how long it takes to return to the prior peak.
- Compare like for like: evaluate funds with similar styles and targets.
- Look beyond one number: also review volatility and tail risk metrics.
- Diversification helps: mixed assets can reduce the worst drawdown.
This is educational content and not financial advice.
Benefits of Using Our
Maximum Drawdown Calculator
Track Portfolio Losses
Measure the largest peak-to-trough decline in your investment portfolio to understand risk exposure.
Enhance Risk Management
Identify periods of significant loss and take steps to prevent or mitigate them in future investments.
Supports Multiple Assets
Analyze drawdowns for single assets or combined portfolios to evaluate overall investment risk.
Beginner Friendly
Easy to use interface with clear instructions for calculating drawdowns even for new investors.
Mobile Responsive
Works perfectly across smartphones, tablets, and desktop screens.
Secure & Private
All calculations are performed locally; no data is stored or shared online.
Frequently Asked Questions
What is a Maximum Drawdown Calculator?
This calculator measures the largest decline in your portfolio value from a peak to a trough over a specific period.
Why is maximum drawdown important?
It helps investors understand potential losses and make better risk management decisions.
Can I calculate drawdowns for multiple assets?
Yes, you can calculate drawdowns for individual stocks or combined portfolios for a holistic view of risk.
Is this calculator suitable for beginners?
Yes, the tool is designed to provide clear and understandable results for investors at all levels.
What inputs are required?
Enter the historical value of your investment portfolio or asset prices over time for the calculation.
Is my data safe?
Yes, all calculations are done locally on your device; no information is transmitted or stored online.