This paper constructs a theoretical model to prove that stock market cycle，investment style and the quality of risk assets exert an interactive influence on the relationship between the winners‘or losers’performance ranking and risk adjustment．In a bull market，high-quality-asset-holding loserswith lower rankings make greater risk adjustments，and high-quality-asset-holding winners with higher ranking-make less risk adjustments．In a bear market，conservative-high-quality-asset-holding loserswith lower rankingsmake less risk adjustments，and conservative-high-quality-asset-holding winners with higher rankings make greater risk adjustments．The empirical test of the theoretical model inference by using a sample of open-ended funds during 2005 － 20 shows supportive evidence．Risk adjustments of winners or losers have remarkable economic consequences．Losers have significant improvements on performance ranking while winners show substantial decline at the end of the year．It is also proved that the performance of losers with lower rankings improves more， and the performance of winners with higher rankings drops more．