# Return on Risk: How We Measure It at FindGreatStocks.com

At [**FindGreatStocks.com**](http://FindGreatStocks.com), we believe that *high return without risk context means nothing.*  
A truly great company isn’t the one with the biggest gains — it’s the one that delivers the **best return per unit of risk**.

That’s why we developed the **Return on Risk (AR/MDD)** metric — a simple, intuitive way to compare how efficiently different companies turn risk into long-term reward.

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## What Is “Return on Risk”?

**Return on Risk** measures how much annual return a company delivers relative to the **maximum drawdown** it has experienced.

> **Return on Risk = Annual Return ÷ Maximum Drawdown**

It shows how efficiently a company rewards investors for every percentage point of potential loss during bad periods.

* A **higher Return on Risk** means the company has produced strong, consistent gains while avoiding deep declines.
    
* A **lower score** indicates volatile or fragile performance — returns that came with big downside exposure.
    

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## How We Measure It at [FindGreatStocks.com](http://FindGreatStocks.com)

At FindGreatStocks, we calculate **Return on Risk** using **real market performance** over multiple horizons:

| Period | Formula |
| --- | --- |
| **3-Year Return on Risk** | 3-Year Annualized Return ÷ 3-Year Max Drawdown |
| **5-Year Return on Risk** | 5-Year Annualized Return ÷ 5-Year Max Drawdown |
| **10-Year Return on Risk** | 10-Year Annualized Return ÷ 10-Year Max Drawdown |

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## Why It Matters

Many investors only look at *returns.*  
But two stocks with the same 10% annual return can have **very different risk profiles**.

* Company A: 10% annual return, max drawdown 15% → RoR = **0.67**
    
* Company B: 10% annual return, max drawdown 50% → RoR = **0.20**
    

Which would you rather own?

Return on Risk quantifies this difference so you can spot companies that **compound steadily**, not just occasionally.

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## How to Use It Inside the FindGreatStocks Scanner

We’ve made it simple to explore this metric directly inside our platform:

1. **Open the Scanner** at [FindGreatStocks.com](https://findgreatstocks.com)
    
2. Click the **“Choose Layout”** section
    
3. Select “**Return on Risk (3, 5, 10 Years)”**
    
4. **Rank** the stocks by this ratio — *highest to lowest*
    
5. Instantly see which companies deliver the best risk-adjusted performance
    

%[https://youtu.be/T5SW1BHqZr0] 

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## Conclusion

**Return on Risk** helps investors focus on what truly matters — *how efficiently a company turns risk into reward.*  
By comparing **Annual Return** to **Max Drawdown** across 3, 5, and 10 years, you can spot the businesses that **compound steadily through cycles**, not just in bull markets.

At **FindGreatStocks.com**, we make it simple to analyze, compare, and rank companies by this metric — all inside the scanner.

👉 **Visit** [**FindGreatStocks.com**](https://findgreatstocks.com) and find your next great investment today.

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