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Quantitative Finance · Glossary

What is Hit rate, profit factor?

Also known as: hit rate · profit factor

Definition 22.5 Research Craft: Predictors, Backtests, Measurement, Portfolios · Chapter 22 — Performance Measurement

The hit rate of a return stream is the share of its non-zero periods with a positive return. Its profit factor is the sum of its gains over the sum of its losses.

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