The area known as Telford Borough today has been a dot on the map for close to two centuries. Although it has had several names, the location is the same. Telford Borough is located in southeastern Pennsylvania, approximately 40 miles northwest of Philadelphia. Read more ...
The Sharpe Ratio is a measure for calculating risk-adjusted return, and this ratio has become the industry standard for such calculations.It was developed by Nobel laureate William F. Sharpe. The Sharpe ratio is the average return earned in excess of the risk-free rate per unit of volatility or total risk.Subtracting the risk-free rate from the mean return, the performance associated with risk-taking activities can be isolated.hat is the difference between a Sharpe ratio and a Sortino ratio. The Sharpe ratio and the Sortino ratio are both risk-adjusted evaluations of return on investment. The Sortino ratio is a ...
Sharpe Ratio. The Sharpe ratio subtracts the risk-free rate from the mutual fundâs rate of return and divides the result by the fundâs number of standard deviations. In other words, it is return divided by risk. The higher the Sharpe ratio, the more return you are getting for the risk you are taking.For example, suppose a fundâs annual ROR is 25 percent with a standard deviation of 10, and the T-Bill returns 5 percent annualized.he fundâs Sharpe ratio is 25 percent minus 5 percent, or 20 percent, divided by the standard deviation of 10, giving a ratio of 2.0. You can shop for mutual funds on any number of bases, but comparing Sharpe ratios is a very important way of gauging whether you are getting a good return for the risk you are taking.