Sharpe ratio
The Sharpe ratio is a measurement often used to synthesize risk into an easy-to-understand metric.
Sharpe ratio
The Sharpe ratio is a measurement often used to synthesize risk into an easy-to-understand metric.
Additional Information
It is a risk-adjusted measure calculated using standard deviation and excess return (the return of an investment in excess of a risk-free return, such as the 90-day Treasury bill) to determine reward per unit of risk. The higher the Sharpe ratio, the better the historical risk-adjusted performance is.
