The Sharpe ratio is the average return earned in excess of the risk-free rate per unit of volatility or total risk.
The Sharpe ratio uses standard deviation to measure a fund’s risk-adjusted returns. The higher a fund’s Sharpe ratio, the better a fund’s returns have been relative to the risk it has taken on.
Sharpe ratio. Using the Sharpe ratio is one way to compare the relationship of risk and reward in following different investment strategies, such as emphasizing growth or value investments, or in holding different combinations of investments.
The higher the Sharpe ratio is, the more return the investor is getting per unit of risk. The lower the Sharpe ratio is, the more risk the investor is shouldering to earn additional returns.
Sharpe Ratio Definition. Sharpe ratio, defined as the excess return or risk premium of a well diversified portfolio or investment per unit of risk, which is measured using standard deviation.You may also know this ratio as the reward to variability ratio or the reward to volatility ratio.
Definition: Sharpe ratio is the measure of risk-adjusted return of a financial portfolio.A portfolio with a higher Sharpe ratio is considered superior relative to its peers. The measure was named after William F Sharpe, a Nobel laureate and professor of finance, emeritus at Stanford University.
A risk-adjusted measure developed by William F. Sharpe, calculated using standard deviation and excess return to determine reward per unit of risk. The higher the Sharpe ratio, the better the fund’s historical risk-adjusted performance.
The Sharpe Ratio is a measure of risk adjusted return comparing an investment’s excess return over the risk free rate to its standard deviation of returns. The Sharpe Ratio (or Sharpe Index) is commonly used to gauge the performance of an investment by adjusting for its risk.
Using the Sharpe Ratio The Sharpe ratio is a measure of return that is often used to compare the performance of investment managers by making an adjustment for risk.
What Is The Sharpe Ratio?
Definition of the Sharpe Ratio As a measure for calculating risk-adjusted return, the Sharpe Ratio is named after William F. Sharpe of the Stanford University.
Takedown. The share of securities of each participating investment banker in a new or a secondary offering, or the price at which the securities are distributed to the different members of an
Sharpe Ratio. This risk-adjusted measure was developed by Nobel Laureate William Sharpe. It is calculated by using standard deviation and excess return to determine reward per unit of risk.