Glossary term
XIRR (Internal Rate of Return)
A time-weighted return calculation for irregular cash flows; how Closelook reports cohort performance, e.g. Pattern 03 at +109%.
XIRR (Extended Internal Rate of Return) is a return calculation that accounts for cash flows occurring at irregular intervals, annualizing the true rate of return on a series of deposits and withdrawals. It is the correct measure for real-money strategies where capital is deployed and harvested at uneven times, unlike a simple percentage gain. Closelook reports cohort performance in XIRR — for example, the Pattern 03 cohort at +109%. See Pattern 03.