The Ulcer Index by Gary H. Elsner, Ph.D.
ARTICLE SYNOPSIS ...The Ulcer Index by Gary H. Elsner, Ph.D.
A good risk index can be useful in the selection of stocks,
funds, and trading systems. Here, then, is the ulcer index, why
it is superior to the standard deviation statistic, and how it
can be used in a variety of personal investing or professional
money management applications.
What is risk, and how is it measured?
Risk is commonly defined
in terms of the volatility of
an investment's total return or
the volatility of the price. The
standard deviation is a good
measure of volatility, since it
measures the amount of variation
around the average and i...