Does the description disclose side effects, auth requirements, rate limits, or destructive behavior?

Annotations already declare readOnly, idempotent, non-destructive and closed-world, so the safety profile is covered. The description adds genuinely new behavior: the null-request fallback to a synthetic example and the rights_confirmed gate that does not constitute licence verification. It stops short of describing how the three methods differ or their data requirements.

Agents need to know what a tool does to the world before calling it. Descriptions should go beyond structured annotations to explain consequences.

Is the description appropriately sized, front-loaded, and free of redundancy?

Two sentences plus one caveat clause, with the primary capability front-loaded and the fallback mode immediately after. Every sentence carries distinct information; nothing is redundant with the annotations.

Shorter descriptions cost fewer tokens and are easier for agents to parse. Every sentence should earn its place.

Given the tool's complexity, does the description cover enough for an agent to succeed on first attempt?

An output schema exists, so return values need no explanation. However, this is a nested-request tool with ten fields and a real distinction between `data_mode` and `rights_confirmed` that is never clarified. The gating rules are complete but the data-contract layer is thin.

Complex tools with many parameters or behaviors need more documentation. Simple tools need less. This dimension scales expectations accordingly.

Does the description clarify parameter syntax, constraints, interactions, or defaults beyond what the schema provides?

Schema description coverage is 0%, so the description must carry parameter meaning, and it only partially does. It explains the null-vs-supplied `request` behavior and the `rights_confirmed` gate, and its method enumeration matches the `method` enum, but as_of, currency, source, data_mode, assets, returns, horizon_days and especially `decay` (the EWMA knob) are left entirely undocumented.

Input schemas describe structure but not intent. Descriptions should explain non-obvious parameter relationships and valid value ranges.

Does the description clearly state what the tool does and how it differs from similar tools?

The description opens with a specific verb and resource set: "Sample, EWMA or Ledoit-Wolf covariance, volatility and correlation of a supplied return history." That is precise enough to distinguish it from the analytics siblings (risk_backtest, risk_es_attribution, risk_tail), though it does not call out an alternative by name.

Agents choose between tools based on descriptions. A clear purpose with a specific verb and resource helps agents select the right tool.

Does the description explain when to use this tool, when not to, or what alternatives exist?

It gives an explicit mode-selection rule: omit the request to run the shipped synthetic example, otherwise supply data and set rights_confirmed=true. It also flags a prerequisite (permission) and an important exclusion (this flag does not verify a licence). No named alternatives, which keeps it below a 5.

Agents often have multiple tools that could apply. Explicit usage guidance like "use X instead of Y when Z" prevents misuse.