Sharpe Ratio The Sharpe Ratio is the portfolio risk premium divided by the portfolio risk. 夏普比率是投资组合风险溢价除以投资组合风险。 The Sharpe ratio, or reward-to-variability ratio, is the slope of the capital allocation line (CAL). The greater the slope (higher number), the better the...
they might feel that the return isn’t high enough for a certain level of volatility. In this case, it would be a bad investment and they should look elsewhere for something with a higher Sharpe ratio.
By utilizing this formula, investors can assess whether an investment’s return justifies the level of the associated risk. A higher Sharpe Ratio indicates a more efficient use of risk to generate returns, while a lower ratio indicates potential inefficiency or excessive risk-taking. ...
sharpe ratio
1.Sharpe ratio 夏普比率;夏普指数;夏普比例 2.Lee Sharpe 李·夏普;夏普;李;李夏普 3.William Sharpe 威廉·夏普;威廉夏普;威廉 4.sharpe index 夏普指数;夏普指标;夏普指數 5.William F Sharpe 夏普 6.Brown and Sharpe wire gauge 布朗沙普线规;布朗沙普线径规;布朗 7.Bill Sharpe 比尔 8.Richard Shar...
Sharpe Ratio = (6.5% – 4.3%) / 0.08 Sharpe Ratio =0.275 For Portfolio Y Sharpe Ratio = (7.8% – 4.3%) / 0.20 Sharpe Ratio =0.175 Therefore, portfolio X is higher than that of portfolio Y which indicates that despite having a lower return portfolio X is a better investment option as...
investments, you should keep in mind that those with a higher Sharpe ratio can be more volatile than those with a lower rate. The higher Sharpe ratio simply shows that the investment's risk-to-reward profile is more optimal or proportional than another. However, there could still be big ...
different portfolios based on the level of the ratio which higher Sharpe ratio is considered to be better than the lower ones. - Sharpe ratio refers to the differential between two portfolios, providing the information to choose between two investment opportunities, given the returns of them are ...
Generally, a ratio of 1 or better is considered good. The higher the number, the better the asset’s returns have been relative to the amount of risk taken. How Is the Sharpe Ratio Calculated? To calculate the Sharpe ratio, you need the following information on the asset you are assessing...
The Sharpe ratio can be helpful only when used to compare very similar investments, like mutual funds and ETFs that track the same underlying index. Still, investors should keep in mind that those investments with a higher Sharpe ratio can be more volatile than those with a lower rate....