What is risk-adjusted return and how do I measure it in todays market?
Before comparing or considering investments, it is better to perform a risk-adjusted return calculation that will adjust the returns according to how risky the investments are. The riskier they are, the more the returns are lowered before any comparison. Technically risk refers to mean volatility, which measures how returns vary over a given period of time. An investment or a portfolio that grows steadily has low risk, and another investment with a value that jumps up and down unpredictably has high risk.
Before comparing or considering investments, it is better to perform a risk-adjusted return calculation that will adjust the returns according to how risky the investments are. The riskier they are, the more the returns are lowered before any comparison. Technically risk refers to mean volatility, which measures how returns vary over a given period of time. An investment or a portfolio that grows steadily has low risk, and another investment with a value that jumps up and down unpredictably has high risk. To create risk and return landscape specify valid comma-separated symbols and hit Plot It button. Please note, the New York Stock Exchange (NYSE) and American Stock Exchange (AMEX) have recently merged. Although Macroaxis has implemented solutions to handle this transition gracefully, you may still find some securities that may not be fully transferred from one exchange to another.
