Report post

What is risk adjusted returns?

Risk adjusted returns refine the rate of return for an investment by measuring how much risk is involved with a particular investment. Generally, it is used in securities markets but can be applied to other markets, such as real estate. First, let’s take a look at a simple graph.

How to improve risk adjusted return?

You can improve risk adjusted return byadjusting your stock position according to market volatility. An increase in volatility will decrease the equities position or vice versa. This strategy is really helpful to avoid big losses and to focus on significant gains.

Should you apply the same risk measure to each investment?

When comparing two or more potential investments, you should apply the same risk measure to each investment under consideration to get a relative performance perspective. Different risk measurements give investors very different analytical results, so it is important to be clear on what type of risk-adjusted return is being considered.

The World's Leading Crypto Trading Platform

Get my welcome gifts