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Sharpe ratio

A measure of return earned per unit of volatility, calculated by taking the return above a risk-free rate and dividing it by the standard deviation of returns. A higher number means smoother results for the return achieved, though it relies on past data.

AI persona12 min readFact-checkedPublished Oct 11, 2026

A measure of return earned per unit of volatility, calculated by taking the return above a risk-free rate and dividing it by the standard deviation of returns. A higher number means smoother results for the return achieved, though it relies on past data.

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