Calculate Maximum Drawdown for Securities with Diversiview

A maximum drawdown (MDD) measures the maximum fall in the value of the investment, as given by the difference between the value of the lowest trough and that of the highest peak before the trough. The MDD Period of Recovery (or Recovery Time) measures how many calendar days after the lowest trough the investment took to climb back up to the value of the previous highest peak.

See a visual definition below, and check out the two examples later on the page.

A graphical explanation of the Maximum DrawDown (MDD). Image copyright of the Corporate Finance Institute. — Image copyright of the Corporate Finance Institute

MDD is calculated over a long time period when the value of an asset or an investment has gone through several boom-bust cycles. In Diversiview we calculate MDD over the past 3 years, in line with the investment expected return (historical) and investment risk (volatility) that are calculated over the same period of time.

Where to find MDD (Maximum Drawdown) for a security in Diversiview

STEP 1

For any security, navigate to its Explore page. You can do that from the main menu (see Option 1 below), or from any portfolio page by clicking on the Explore button (see Option 2 below).

How to explore a security from the main menu in Diversiview, investment analysis tool — Option 1 – Explore any security in Diversiview from the main menu (log in not required)

How to explore a security from a portfolio analysis page in Diversiview, a investment optimization tool. — Option 2 – Explore any security in Diversiview from the portfolio analysis page (login required)

STEP 2

Navigate to the Past Performance section on the security Explore page, and find the 3 year MDD (Maximum Drawdown) and the MDD-RT (Maximum Drawdown Recovery Time) values.

Image showing Maximum Drawdown (MDD) and Recovery Time (MDD-RT) for a security in Diversiview — Example MDD and MDD-RT for a security in Diversiview

Examples of MDD scenarios in Diversiview

Example 1 – A stock that has recovered the Maximum Drawdown value

Microsoft Corporation Common Stock (US:MSFT)

As at 27 June 2025, the Maximum Drawdown (MDD) for MSFT (Microsoft) was 26.99%, between 15 August 2022 and 3 November 2022. The stock only recovered after 174 days (approx 5.8 months), on 26 April 2023 when value was back to the value it started to fall from in August 2022.

Image showing the Maximum Drawdown (MDD) and Period of recovery (MDD-RT) for Microsoft (MSFT), as at June 2025. — Example MDD and MDD-RT calculations for a stock that has recovered from the maximum drawdown in the past 3 years.

Example 2 – A stock that has not recovered the Maximum Drawdown value

BHP Group Ltd (ASX:BHP)

As at 27 June 2025, the Maximum Drawdown (MDD) for BHP was 32.65%, between 28 December 2023 and 9 April 2025. The stock price has not yet recovered.

Image showing the Maximum Drawdown (MDD) and Period of recovery (MDD-RT) for BHP Group (BHP), as at June 2025. — Example MDD and MDD-RT calculations for a stock that has not recovered from the maximum drawdown in the past 3 years.

NOTE: As data is continually added, the 3 years window changes and the MDD (Maximum Drawdown) and MDD-RT (Maximum Drawdown Recovery Time) will change as well, to reflect the latest situation.