Sharpe Ratio
A measure of return earned per unit of risk taken.
What is Sharpe Ratio?
The Sharpe ratio measures risk-adjusted performance by dividing an investment's return in excess of the risk-free rate by the standard deviation of its returns. A higher value means more return was earned for each unit of volatility taken on. It lets investors compare strategies or portfolios on a like-for-like basis rather than by raw return alone.