What Is a Risk Adjusted Return?
The risk-adjusted return refers to the profit index after eliminating risk factors. Among them, Sharpe ratio, Treynor index and Jensen index are three classic risk-adjusted returns indicators.
Risk-adjusted return
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- Chinese name
- Risk-adjusted return
- Definition
- Profit indicators after eliminating risk factors
- Classification
- Treynor Index Jensen Index
- Typical
- Sharp ratio
- The risk-adjusted return refers to the profit index after eliminating risk factors. Among them, Sharpe ratio, Treynor index and Jensen index are three classic risk-adjusted returns indicators.
- Income indicator
- 1. Sharpe ratio refers to the excess returns that an investment product receives from unit risk. The higher the Sharpe ratio for investing in wealth management products, the higher the excess returns under the premise of bearing the same risks, the better the performance of investment wealth management products.
- 2. The Treynolds Index uses the systemic risk of investment in wealth management products as a factor for income adjustment, reflecting the excess returns obtained by investing in wealth management products to bear unit system risk. The larger the value of the index, the higher the excess return on the unit system risk.
- 3. The Jensen Index reflects the excess rate of return on investment and wealth management products relative to the market portfolio (ie, average return level). The larger the index value, the better.