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The Sharpe ratio is one of the most used metrics in traditional finance to assess the risk-return performance of an asset. At IntoTheBlock we calculate this metric the following way:
Sharpe Ratio = Average Return / Standard Deviation of Returns
The sharpe ratio displayed can be calculated for different time frames, and does not consider the risk-free rate as it has been at near-zero levels adjusted to inflation.
The Sharpe ratio indicates which asset has best performed relative to its volatility. In the example above, we observe that Bitcoin has been the best risk-adjusted asset over the last 30 days, while Ethereum has been the worst out of the assets displayed.
Last modified 2yr ago