Sharpe Ratio
A higher Sharpe ratio indicates more stable and consistent returns. The Sharpe ratio distinguishes between equally profitable return paths when one is steadier and the other more volatile. Log returns can be summed to obtain total compound…
1 sources - 5 claims
A higher Sharpe ratio indicates more stable and consistent returns. The Sharpe ratio distinguishes between equally profitable return paths when one is steadier and the other more volatile. Log returns can be summed to obtain total compound growth, unlike plain percentage returns. The Sharpe ratio measures return earned per unit of volatility risk.