Updates: Sharpe ratio
A new function for calculating the Sharpe ratio has been added to the watchlist section of the website.
What is the Sharpe Ratio?
This indicator is used to assess if the investment risk is worth taking. The Sharpe Ratio was developed by the Nobel laureate William F. Sharpe. The ratio shows how much profit the investor gets per unit of risk.
MonInvAI calculates an indicator for the entire portfolio on your watchlist.The Ratio can take different values:
SR < 0
It’s not worth investing in such an asset/portfolio, it’s better to invest in a more risk-free asset with a higher return.
0 < SR < 1
The risk taken by the investor doesn’t pay off. Such portfolios / strategies can be applied if there are no alternatives.
SR ≥ 1
Any Sharpe ratio greater than 1.0 is considered acceptable to good by investors. It means that the risk pays off and the portfolio / strategy can be adopted.
Thus, with the help of a new feature of our platform, you will be able to determine which portfolio is most suitable for you. Since the higher the value of the Sharpe ratio, the better your chosen strategy.
