What Is the Sharpe Ratio?

The Sharpe ratio calculates a security's or an asset class's return per unit of risk. It allows you to compare different securities with a common metric and helps to answer whether you are being paid (in the form of return) for the risk you are taking. The Sharpe ratio is a very important statistic if risk-adjusted returns are important to you. For illustrative purposes only.

ALTERNATIVES ARE THE NEW REALITY

Discover why investors are looking beyond traditional assets.