Measure how far gold falls from a specified peak or high to a later low. The result includes the percentage decline and the gain required to return to the high.
Both percentages use the same two prices but answer different questions: the first measures the fall, while the second measures the rise required to undo it.
Looking only at the percentage gain between two dates can hide how much a price has fallen from a previous peak. Peak-to-trough decline provides a direct measure of downside from the selected high.
An investor's actual loss can differ because purchase price, transaction costs, premiums and selling spreads determine the economic position. This tool is a price-level analysis.
Yes mathematically for the decline, but the recovery percentage back to the high is not finite.
The recovery is measured from the lower base.
Yes, provided both inputs represent comparable portfolio values.