Every investment carries with it some level of risk and reward. Unfortunately, these are unknown variables. They change over time and in the face of market factors, and there’s no way of knowing ...

Individual investors typically look at their accounts in terms of profit/loss. For professional portfolio managers, the assumption is that they will make a profit over the long run, so they're ...

Most investment professionals are familiar with the formula known as the Sharpe Ratio. The calculation is so omnipresent in financial circles that it even features as a sales objection on the ...

The Treynor ratio and the Sharpe ratio are financial metrics that use different approaches to evaluate the risk-adjusted returns of an investment portfolio. The Treynor ratio employs beta and measures ...

The Sharpe Ratio is a mathematical formula which measures the performance of an asset or a group of assets relative to their assumed risk. Formulaically, the Sharpe Ratio is the expected returns of an ...

With the interest in hedge funds and other alternative investment mechanisms soaring, here is an attempt to provide an intuitive explanation for understanding and interpreting the Sharpe Ratio and the ...

Many investors make the mistake of simply focusing on return. But risk is a key element of portfolio performance, and in many cases, it doesn't make sense to take on extra risk for a minimal amount of ...

The Sharpe ratio compares an investment's excess return over a benchmark to the standard deviation of returns. The higher the Sharpe ratio, the better the investment's historical risk-adjusted ...