Drawdown Three Years Formula in Excel

The Drawdown Three Years formula in Excel (with MarketXLS) is a powerful tool for analyzing the peak-to-trough decline of a stock or other trading symbol over a three-year period. By automatically calculating maximum drawdown from the past 1,096 days to yesterday’s date, you can easily assess the risk of an investment and make data-driven decisions.

Understanding Drawdown Three Years

• Purpose: Calculates the highest percentage drop in the price of a security over the last three years.
• Key Benefits:
  • Instantly measure historical drawdown.
  • Helps evaluate an investment’s downside risk.
  • Suitable for benchmarking different assets over equal time frames.
• When to Use:
  • When evaluating the worst-case scenario for a long-term investment.
  • When comparing drawdown rates across multiple symbols.

Syntax and Parameters

Use this MarketXLS function in Excel by referencing a symbol directly:

=DrawdownThreeYears(Symbol)

?? Note: This function returns the peak-to-trough decline as a percentage (e.g., -26.45). If the symbol is invalid or data is unavailable, the function returns "NA".

Return Value:
• Returns a numerical value representing the maximum drawdown percentage over the last three years.

Examples and Usage

Below are a few ways to reference symbols for the DrawdownThreeYears formula:

• U.S. Stock Symbol:

  =DrawdownThreeYears("MSFT")

• Index Symbol:

  =DrawdownThreeYears("^SPX")

• Option Symbol:

  =DrawdownThreeYears("@MSFT 110122C00020000")

• Cryptocurrency Symbol:

  =DrawdownThreeYears("BTCUSD:DEFAULT")

? Pro Tip: To quickly compare multiple stocks, drag the formula across different cells, each with a different symbol reference.

Real-World Application

1. Insert the formula in your Excel sheet for various symbols.
2. Compare the maximum drawdown values to understand which investments experienced the largest declines.
3. Use this information to manage risk or rebalance your portfolio accordingly.

Common Questions

1. Why do I see “NA”?

   • Ensure you have a valid MarketXLS license and that the symbol is spelled correctly. If data is unavailable for the past three years, the function returns "NA."

2. How often is the data refreshed?

   • MarketXLS updates data once daily (usually around market close). Your drawdown percentage may change after each data refresh.

3. How do I improve performance?

   • If you’re working with many formulas, consider refreshing data after entering all symbols or use MarketXLS caching. This helps reduce repeated server calls.

4. Can I specify a different period for the drawdown?

   • Use related drawdown functions or time-specific MarketXLS analytics to examine different timeframes, such as 7 days, 30 days, or a custom period.

5. What if I need dividends in my calculations?

   • MarketXLS also provides dividend-related formulas (e.g., Total Dividends Paid). Combine them with drawdown data to get a more comprehensive performance picture.