What is the difference between Treynor ratio and Sharpe ratio in the context of cryptocurrency investments?
![avatar](https://download.bydfi.com/api-pic/images/avatars/sZSYB.jpg)
Can you explain the difference between Treynor ratio and Sharpe ratio and how they are applied in the context of cryptocurrency investments?
![What is the difference between Treynor ratio and Sharpe ratio in the context of cryptocurrency investments?](https://bydfilenew.oss-ap-southeast-1.aliyuncs.com/api-pic/images/en/3d/863dca5fd11cfe0172103b7ab60af860383932.jpg)
1 answers
- The Treynor ratio and Sharpe ratio are two popular risk-adjusted performance measures used in the field of finance. The Treynor ratio measures the excess return of an investment per unit of systematic risk, while the Sharpe ratio measures the excess return per unit of total risk. In the context of cryptocurrency investments, the Treynor ratio can be used to assess the risk-adjusted performance of a portfolio by considering the systematic risk associated with cryptocurrencies. On the other hand, the Sharpe ratio provides a more comprehensive measure of risk-adjusted performance by taking into account both systematic and unsystematic risk. By comparing the two ratios, investors can evaluate the risk-return tradeoff of different cryptocurrency investments and make informed decisions based on their risk tolerance and investment objectives.
Dec 18, 2021 · 3 years ago
Related Tags
Hot Questions
- 98
How does cryptocurrency affect my tax return?
- 88
How can I minimize my tax liability when dealing with cryptocurrencies?
- 72
How can I protect my digital assets from hackers?
- 56
How can I buy Bitcoin with a credit card?
- 46
What is the future of blockchain technology?
- 41
What are the tax implications of using cryptocurrency?
- 36
What are the best digital currencies to invest in right now?
- 34
What are the advantages of using cryptocurrency for online transactions?