Omega

The Omega chart is way of partitioning returns into loss and gain above and below a return threshold and then considering the probability weighted ratio of returns above and below the partitioning.

Omega in a nutshell measures probability of making an excess return over a threshold amount.

Note: The higher the Omega historically, the better.

e.g. If you wanted a return of 2%, a fund with an omega of 6 at the 2% level would be more likely to over perform than underperform than a fund with an omega of 3.

The x axis shows all the possible returns and the y axis shows the Omega value.