I’m surprised to read a specific opinion in this topic. The result of a simple geometric return minus arithmetic return can only be between 0 and a +number. Ignore what volatility drag means for a moment and focus on the math, the result could be linear (like it or not negative numbers exit).

Someone mentioned about diversification return (DR). I don’t understand the reason for using variance as a substitution for return. If we applied what is stated above as the method to compute DR and treat the arithmetic computation as a benchmark, then DR is just the compounding differences between the two return calculation.