Skip to main content
Trading Terms

Reward-Risk Ratio

Let's take a look at a metric that is crucial in the world of finance - the monthly excess return to risk comparison. This is a ratio that measures the performance of a particular investment by dividing its alpha (the excess return above the market return) by its standard deviation (the measure of risk). A ratio higher than 0.4 is considered excellent, indicating strong returns with relatively low risk. So, when analyzing investments, keep an eye on this important ratio for a better understanding of their performance.

Related terms

Annealing (Simulated)

Understand the meaning and definition of Annealing (Simulated) in the context of stock market, trading, and investments.

MORE
Qualified acceptance

Understand the meaning and definition of Qualified acceptance in the context of stock market, trading, and investments.

MORE
Anaume

Understand the meaning and definition of Anaume in the context of stock market, trading, and investments.

MORE
Price/Earnings Ratio

Understand the meaning and definition of Price/Earnings Ratio in the context of stock market, trading, and investments.

MORE
Channel

Understand the meaning and definition of Channel in the context of stock market, trading, and investments.

MORE
Limit Move

Understand the meaning and definition of Limit Move in the context of stock market, trading, and investments.

MORE

Open Free Demat Account!

Join our 3.8 Cr+ happy customers

+91
Explore other categories
Enjoy Zero Brokerage on Equity Delivery
10 Cr+DOWNLOADS

Enjoy Zero Brokerage On Stock Investments

Get the link to download the App

Scan this QR code to download the app
Get it on Google PlayDownload on the App Store

Open Free Demat Account!

Join our 3.8 Cr+ happy customers
+91