The Treynor ratio, also known as the reward-to-volatility ratio, is a performance metric for determining how much excess return was generated for each unit of risk taken on by a portfolio.

3 days ago · A higher Treynor Ratio indicates a portfolio is generating more return per unit of systematic risk, signaling effective risk management. This is valuable when comparing similar investments. For example, a portfolio manager analyzing two mutual funds can use the Treynor Ratio to determine which fund offers better compensation for market risk.

What is the Treynor Ratio? Jack Treynor, an eminent American economist and one of the founding fathers of the Capital Asset Pricing Model , developed this metric. It measures the excess returns a financial asset or a group of securities earns …

Mar 5, 2024 · What is the Treynor Ratio? What is a Good Treynor Ratio? Treynor Ratio vs. Sharpe Ratio: What is the Difference? What is the Treynor Ratio? The Treynor Ratio is a measure of a portfolio’s excess return per unit of systematic risk, or the market volatility of the portfolio.

Apr 8, 2024 · The Treynor Ratio, sometimes called the reward to volatility ratio, is a risk assessment formula that measures the volatility in the market to calculate the value of the excess return per unit risk taken in a portfolio.

May 22, 2023 · The Treynor Ratio, also known as the reward-to-volatility ratio, is a performance measurement that evaluates the return generated by an investment portfolio relative to its systematic risk. A higher Treynor Ratio indicates a better risk-adjusted performance of …

Treynor ratio is a metric widely used in finance for calculations based on returns earned by a firm. It is also known as a reward-to-volatility ratio or the Treynor measure. The metric got its name from Jack Treynor, who developed it and used it first. A higher number indicates a more suitable investment or is considered a good Treynor ratio.

What is the Treynor Ratio? The Treynor Ratio is a portfolio performance measure that adjusts for systematic risk. In contrast to the Sharpe Ratio, which adjusts return with the standard deviation of the portfolio, the Treynor Ratio uses the Portfolio Beta, which is a measure of systematic risk.

Oct 8, 2024 · The Treynor ratio, or Treynor measure, is a widely used performance metric that measures how much a portfolio returns are above the risk-free rate by taking on an extra unit of systematic risk. In essence, the Treynor ratio helps you to analyze if the risk you are taking on is rightly compensated.

The Treynor ratio, sometimes called the reward to volatility ratio, is a risk assessment formula that measures the volatility in the market to calculate the value of an investment adjusted risk.