Unknown Indicator
Sortino Ratio In A Nutshell
Taking a look at the Sortino ratio, it is a close cousin of the Sharpe ratio. If you need more information on the Sharpe ratio, check out the equities center on Macroaxix. This ratio has the ability to pick apart the potential negative volatility from the general volatility of the market.
When you have a portfolio, it is important to measure the amount of risk that is included in your portfolio. This ratio is beneficial if you are trying to evaluate the amount of negative risk may be in an investment. What this ratio also uses is standard deviation to the downside.
If there is one thing we’ve all learned through financial education is there are many different kinds of ratios out there, telling us different stories about the data we are looking at. The Sortino ratio is no different.
Closer Look at Sortino Ratio
With each ratio you have to understand what factors go into it and what makes it tick because you may find it is not addressing the appropriate parts of your investing or trading.
Once you find the end number, you want the ratio to be as high as possible, as this indicates that the returns are being earned with more efficiency. You may see higher returns with one fund, but the effenciency with which they are being earned may create more risk.
Investing is a balancing act between risk and return, and once you find your sweet spot you can begin to optimize other areas of your investing portfolio. Be sure to test this and know this ratio inside and out before implementing this into your current setup.
Other Indicators
All Technical Analysis
Explore Investing Opportunities
You can quickly originate your optimal portfoio using our predefined set of ideas and optimize them against your very unique investing style. A single investing idea is a collection of funds, stocks, ETFs, or cryptocurrencies that are programmatically selected from a pull of investment themes. After you determine your investment opportunity, you can then find an optimal portfolio that will maximize potential returns on the chosen idea or minimize its exposure to market volatility.Did you try this?
Run Premium Stories Now
Premium StoriesFollow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope |
All Next | Launch Module |
Other Complementary Tools
Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
Money Managers Screen money managers from public funds and ETFs managed around the world | |
Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
Fundamental Analysis View fundamental data based on most recent published financial statements | |
Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
CEOs Directory Screen CEOs from public companies around the world | |
Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. |