Definition:

1-week Performance refers to the percentage change in the price of a financial asset over a one-week period. It is a short-term metric used to assess how an asset has performed in the recent past.

Formula:

((Price at end of week - Price at start of week) / Price at start of week) * 100

How to use the metric:

Investors and traders use the 1-week Performance metric to gauge short-term trends and momentum in an asset's price. It can help in making quick trading decisions or assessing the immediate impact of news or events on an asset's value.

Limitations:

1-week Performance is highly volatile and can be influenced by short-term market noise, making it less reliable for long-term investment decisions. It may not reflect the fundamental value of an asset and can be misleading if used in isolation.

Applies to:

This metric is commonly used in industries with highly liquid and volatile assets, such as stocks, commodities, and cryptocurrencies, where short-term price movements are significant.

Doesn't apply to:

Industries with less frequent trading or where assets have low volatility, such as real estate or certain fixed-income securities, may not benefit from this metric due to the lack of significant weekly price changes.

Summary:

1-week Performance is a useful metric for assessing short-term price changes in volatile markets. However, its high sensitivity to market noise and short-term fluctuations makes it less suitable for long-term investment analysis. It is best used in conjunction with other metrics to gain a comprehensive view of an asset's performance.