The Sharpe Ratio

Hedge funds traditionally use benchmarks like the Sharpe Ratio and Sortino Ratio to gauge the risk-efficiency of portfolios. The Sharpe Ratio is the effective return of a risky asset per unit of risk (i.e variance), while the Sortino Ratio is the effect return of a risky asset per unit of downside risk. The higher the numerical value of both these ratio, the more risk efficient a portfolio is said to be.


Leave a Reply

Your email address will not be published. Required fields are marked *

What is 14 + 7 ?
Please leave these two fields as-is:
IMPORTANT! To be able to proceed, you need to solve the following simple math (so we know that you are a human) :-)