/**
 * Financial calculation utilities
 */
export const financialUtils = {
  /**
   * Calculate the Sharpe ratio 
   * @param returns Array of period returns
   * @param riskFreeRate The risk-free rate (e.g. 0.02 for 2%)
   */
  calculateSharpeRatio(returns: number[], riskFreeRate: number = 0.02): number {
    if (returns.length < 2) {
      return 0;
    }
    
    // Calculate average return
    const avgReturn = returns.reduce((sum, val) => sum + val, 0) / returns.length;
    
    // Calculate standard deviation
    const squaredDiffs = returns.map(val => Math.pow(val - avgReturn, 2));
    const avgSquaredDiff = squaredDiffs.reduce((sum, val) => sum + val, 0) / squaredDiffs.length;
    const stdDev = Math.sqrt(avgSquaredDiff);
    
    // Avoid division by zero
    if (stdDev === 0) return 0;
    
    // Calculate Sharpe ratio
    return (avgReturn - riskFreeRate) / stdDev;
  },
  
  /**
   * Calculate the maximum drawdown 
   * @param equityCurve Array of equity values over time
   */
  calculateMaxDrawdown(equityCurve: number[]): number {
    if (equityCurve.length < 2) {
      return 0;
    }
    
    let maxDrawdown = 0;
    let peak = equityCurve[0];
    
    for (let i = 1; i < equityCurve.length; i++) {
      if (equityCurve[i] > peak) {
        peak = equityCurve[i];
      } else {
        const drawdown = (peak - equityCurve[i]) / peak;
        maxDrawdown = Math.max(maxDrawdown, drawdown);
      }
    }
    
    return maxDrawdown;
  },
  
  /**
   * Calculate the Compound Annual Growth Rate (CAGR)
   * @param startValue Initial investment value
   * @param endValue Final investment value
   * @param years Number of years
   */
  calculateCAGR(startValue: number, endValue: number, years: number): number {
    if (years <= 0 || startValue <= 0 || endValue <= 0) {
      return 0;
    }
    
    return Math.pow(endValue / startValue, 1 / years) - 1;
  }
};