The Ulcer Index is a market risk measure or technical analysis indicator. It was developed Peter Martin and Byron McCann. It has been designed as a measure of volatility, but only volatility in the downward direction but the amount of drawdown or retrenchment occurring over a period. Other volatility measures like standard deviation treat up and down movement equally, but a … [Read more...]
Application and Chart of Ulcer Index
This tool is often used in conjunction with other risk measurements such as standard deviation. Investors who are risk averse should probably stay away from securities with high UI values because, if these securities experience a severe decline, they are unlikely to recover in the near future. Since the ulcer index measures change from a recent peak, it is more practical to … [Read more...]