---
title: "Artemis Capital: Moneyball for Modern Portfolio Theory"
description: CWARP is - wins over replacement - for the asset management industry. It is a one-stop number that assesses whether alternate investments improve or hurt the pre-existing portfolio, measuring return, risk, and maximum drawdown altogether.
---

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# [Artemis Capital: Moneyball for Modern Portfolio Theory](https://www.allocator.com/media/moneyball-for-modern-portfolio-theory)

 Written by [Liam Poole](https://www.allocator.com/media/author/liam-poole) | Sep 7, 2023, 1:42:49 PM

Every year trillions of dollars in investment decisions are made based on a simple equation known as the Sharpe Ratio. In the investment industry, the Sharpe Ratio, first devised by then-32-year-old William Sharpe in his classic 1966 paper "Mutual Fund Performance," has become the dominant metric for portfolio construction.

 

In a groundbreaking research paper, Chris Cole, Founder & Chief Investment Officer at Artemis Capital Management uses the "Moneyball approach", that what matters in sports is whether a player helps the team win, to prove that what matters in investing is whether an asset improves the risk-adjusted returns of your total portfolio.

 

*"Your goal shouldn't be to buy players. Your goal should be to buy wins. In order buy wins, you need to buy runs." - Peter Brand (aka. Paul DePodesta), Moneyball*

 

In this study, Chris and the team at Artemis Capital Management have created a new measure for investment teams to use in their quantitative investment due diligence processes to replace the Sharpe Ratio:

 

COLE WINS ABOVE REPLACEMENT PORTFOLIO (CWARP)

 

CWARP is "wins over replacement" for the asset management industry. It is a one-stop number that assesses whether alternate investments improve or hurt the pre-existing portfolio, measuring return, risk, and maximum drawdown altogether.

 

In this webinar with Chris Cole, Founder & Chief Operating Officer at Artemis Capital we discussed:

- The mechanics of CWARP and how was it established
- How Allocators to Hedge Funds can apply this metric effectively to screen and monitor potential and existing hedge fund investments
- The implications for investment teams who do not adopt their quantitative screening and investment monitoring processes to include CWARP

[View full post](https://www.allocator.com/media/moneyball-for-modern-portfolio-theory)

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