WHRs

WHR stands for Weighted Harmonic Ratio. It is a metric used in various fields, particularly in finance and performance analysis, to assess the relative performance of an investment or strategy. The WHR takes into account both the magnitude of gains and losses, as well as their frequency, to provide a more nuanced view of performance than simple average returns.

The calculation of the Weighted Harmonic Ratio typically involves summing the ratio of positive returns to negative returns, weighted by the size of those returns. This means that larger gains contribute more positively to the ratio, while larger losses contribute more negatively. The harmonic mean aspect of the calculation penalizes volatility and provides a more conservative measure of performance. A higher WHR generally indicates better risk-adjusted returns, suggesting that an investment or strategy has achieved its gains with less exposure to significant drawdowns.

In practice, WHRs are used to compare different investment options or trading strategies. A strategy with a higher WHR might be preferred even if its absolute returns are similar to another strategy, because it achieved those returns with less volatility or fewer deep losses. It's a tool that helps investors move beyond simple profit figures to understand the quality of those profits over time.