Unknown Indicator
Treynor Ratio In A Nutshell
Using the Treynor ratio is essentially measuring the returns of your investment minus what you may have earned in an environment where there was minimal to no risk. This is important because you can measure how much of a premium your equity may be trading at or a discount. Not only that, but you can being to measure the amount of risk you are taking for the return on investment you are getting.
There are many ratios out there that measure anything from risk to cash flow, but the Treynor ratio is around to help traders and investors measure risk to reward.
Closer Look at Treynor Ratio
If you have yet to understand risk, begin looking at other risk measurements such as risk adjusted performance and understand what the risk free rate of return is. Ratios us as this are meant to help you mitigate risk and continue to bring in underprice equities. The goal of any portfolio is to increase risk while keeping a stable risk level.
Risk is one of the most important aspects of investing and finance and should be monitored with care. Using this ratio can also help you compared equities apples to apples, letting you understand which investments may be offering better value than others. When implementing this you should doodle on the side until you fully understand how to use this ratio. After that, feel free to implement this as you wish and begin exploring the world of risk. If you get stuck, reach out to an investing professional and they can help to point you in the right direction.
Other Indicators
All Technical Analysis
Generate Optimal Portfolios
Other Complementary Tools
| CEOs Directory Screen CEOs from public companies around the world | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios |