What are the limitations of using the Treynor measure in the cryptocurrency market?

1 answers

• Dec 18, 2021 · 3 years ago
  When it comes to evaluating performance in the cryptocurrency market, the Treynor measure has its limitations. The high volatility and lack of historical data make it challenging to accurately measure risk and calculate the beta coefficient. Additionally, the assumption of a linear relationship between risk and return may not hold true in the cryptocurrency market, where market manipulation and speculative behavior can greatly impact prices. Therefore, it's important to consider other metrics and indicators in conjunction with the Treynor measure to get a more comprehensive understanding of performance in the cryptocurrency market.
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