Calamari Ratio
It’s 2026. The financial advisor you vibe coded promises a 432% return, but before you buy the Cybertruck, you need the Calamari Ratio. Named for the legend Jim Simons, this will tell u if your bot is a Kraken (real math) or Fried Calamari (over-fitted garbage).
The Math (Without Formulas)
The Calamari Ratio is a three-way filter that kills your ego to save your capital:
CalamariRatio = (Meat) * (Grip) * (Polish)
Meat: Compound annual return / maximum drawdown— This is Return divided by Pain. If you made 400% but endured a 90% drawdown, your "meat" is tough and unpalatable. We want high yield with low risk.
Grip (n / n + k): A "Skepticism Tax" based on trade count (n). We compare your strategy to strategy_variance/market_variance (the Ink Factor). You need "tentacles" (volume) to prove the signal isn't just a lucky streak, cause when the market moves and the AI overfit the data, you're left with soggy fried Calamari
Polish (1 – |difference(CR_raw_halves)|/sum(CR_raw_halves) ): The final, hardened score. We rub the Raw meat against a Stationarity Test. If the second half of your trade history doesn't recognize the first, the "Polish" is lost and the score is crushed. Only consistent, stationary bots survive.
The Math (Without Formulas)
The Calamari Ratio is a three-way filter that kills your ego to save your capital:
CalamariRatio = (Meat) * (Grip) * (Polish)
Meat: Compound annual return / maximum drawdown— This is Return divided by Pain. If you made 400% but endured a 90% drawdown, your "meat" is tough and unpalatable. We want high yield with low risk.
Grip (n / n + k): A "Skepticism Tax" based on trade count (n). We compare your strategy to strategy_variance/market_variance (the Ink Factor). You need "tentacles" (volume) to prove the signal isn't just a lucky streak, cause when the market moves and the AI overfit the data, you're left with soggy fried Calamari
Polish (1 – |difference(CR_raw_halves)|/sum(CR_raw_halves) ): The final, hardened score. We rub the Raw meat against a Stationarity Test. If the second half of your trade history doesn't recognize the first, the "Polish" is lost and the score is crushed. Only consistent, stationary bots survive.
The Reality Check: "That 400% print is wild, but what’s the Ink Factor? If you’ve only done ten trades, you’re just eating Fried Calamari—it’s gonna go soggy the second volatility spikes."
The Validation: "I finally ran the stationarity test on my SOL bot. The Polish is holding at 0.95. I think I’ve actually caught a Kraken."
The Roast: "Bro, that's pure Rubber. Your drawdown is twice your return and your trade count is tiny. I bet it has a whack Calamari Ratio."
The Validation: "I finally ran the stationarity test on my SOL bot. The Polish is holding at 0.95. I think I’ve actually caught a Kraken."
The Roast: "Bro, that's pure Rubber. Your drawdown is twice your return and your trade count is tiny. I bet it has a whack Calamari Ratio."
Calamari Ratio by drstarheartsong March 25, 2026
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