Altcoins News
By Steven Anderson
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Reportedly, those who are buying Ethereum considered the fact that Ethereum has outperformed its major rivals. This has been made possible by the surge in decentralized finance.
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There is lot of hope on the technical adjustment EIP-1559, which aims to reduce the volatility of ethereum's fees by introducing a mechanism to burn some of those transaction…
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When the Sharpe Ratio calculation, is done for a 4 year HODL period, it seems a sensible choice as it is sufficient time to cover a full bear to bull cycle for Bitcoin.
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Banks calculate risk-weighted assets by multiplying “exposure amount by the relevant risk weight for the type of loan or asset.
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Reportedly risk adjusted returns is defined as the ROI / Risk. Where the risk is calculated as the changeability (volatility) of the ROI. This is known as the Sharpe Ratio.
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Reportedly, the Sharpe Ratio is one of the most used metrics in traditional finance to assess the risk-return performance of an asset.
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The greater the value of the Sharpe ratio, the more attractive the risk-adjusted return.
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Investopedia states: “The Sharpe ratio adjusts a portfolio’s past performance—or expected future performance—for the excess risk that was taken by the investor.
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A high Sharpe ratio is good when compared to similar portfolios or funds with lower returns.
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Low correlations decreases the overall return of the portfolio without sacrificing on the return.
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Therefore, the greater the Sharpe Ratio the better the portfolio is risk adjusted. The Sharpe ratio can be used to assess whether the returns are due to excess risk…
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The Sharpe ratio is also used to assess the overall risk-return characteristics when newer asset classes are included in the portfolio.
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The downside to Sharpe ratio is that it assumes that the returns are normally distributed.
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