What are the differences between Sharpe ratio and Sortino ratio in the context of cryptocurrency investments?

1 answers

• May 05, 2022 · 3 years ago
  The Sharpe ratio and Sortino ratio are two commonly used metrics in the world of cryptocurrency investments. The Sharpe ratio measures the risk-adjusted return of an investment by taking into account both the total volatility and excess return. On the other hand, the Sortino ratio focuses specifically on the downside risk by considering only the volatility associated with negative returns. Both ratios help investors assess the risk and return of their cryptocurrency portfolios, but the Sharpe ratio provides a more comprehensive view by considering both upside and downside volatility. It is important to note that these ratios should not be the sole basis for investment decisions. Investors should also consider other factors such as market conditions, diversification, and their own risk tolerance.
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