Historical performance refers to the analysis of past data to evaluate how an investment, asset, or company has performed over time. This information is often used by investors to make informed decisions about future investments. By examining trends, returns, and volatility, individuals can gain insights into potential risks and rewards. In finance, historical performance is typically assessed through metrics such as annual returns, standard deviation, and Sharpe ratio. These metrics help investors understand how an asset has reacted to market conditions and economic events, providing a clearer picture of its reliability and potential for future growth.