Categories: Ratio

Treynor Ratio in Forex Trading: An Academic Overview

The Treynor Ratio is a risk-adjusted measure of a portfolio’s performance, often used in the Forex market to calculate the expected returns of a portfolio. This ratio measures the quality of portfolios and how they fare against benchmark performance. The Treynor Ratio looks at the asset’s return compared to its risk. It takes into account the risk-free rate and volatility to measure how efficient the portfolio is relative to the market. It is important for investors to understand this ratio and how it affects their portfolio so that they can make informed decisions on their investments.

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