Sharpe Ratio


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.

💡 How can I use it?

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.

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