Two investments may generate similar returns—but the amount of risk taken to achieve those returns can be very different. That’s where the Sharpe Ratio can help. Simply put, the Sharpe Ratio measures how much excess return an investment has generated for each unit of risk taken. If two investments give you similar returns, the one that achieved those returns with lower volatility may have a higher Sharpe Ratio. A Sharpe Ratio is one measure for comparing risk-adjusted performance. It should be considered alongside other factors such as your financial goals, investment horizon, diversification, costs, and risk capacity. Visit : www.lakshme.com Register Free for Women Financial Literacy.Learn financial concepts in simple language. Build confidence. Make informed money decisions. #lakshme #financialeducationforwomen #financialliteracyworkshop #financialliteracy #womenempowerment #financialeducationinindia #financialempowermentforwomen #buddyforfinance #financebuddyforwomen #lakshmebffwomen #empowermentwomen
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What Is the Sharpe Ratio? | Understanding Return vs. Risk

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