Which ratio, Sharpe ratio or Sortino ratio, is more suitable for assessing the risk and return of digital assets?

3 answers

• kimtaeyongiOct 06, 2024 · 8 months ago
  The Sharpe ratio and Sortino ratio are both commonly used to assess the risk and return of digital assets. The Sharpe ratio takes into account both the total return and the volatility of the asset, while the Sortino ratio focuses on the downside risk. The Sharpe ratio is more widely used and provides a measure of risk-adjusted return. On the other hand, the Sortino ratio is considered more suitable for assets with asymmetric risk, as it only considers the downside volatility. Ultimately, the choice between these ratios depends on the specific characteristics of the digital asset and the investor's risk preferences.
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• StarlightApr 13, 2021 · 4 years ago
  When evaluating the risk and return of digital assets, both the Sharpe ratio and Sortino ratio can be useful tools. The Sharpe ratio provides a measure of risk-adjusted return by considering both the total return and the volatility of the asset. On the other hand, the Sortino ratio focuses specifically on the downside risk, making it more suitable for assets with asymmetric risk. It is important to consider the specific characteristics of the digital asset and the investor's risk preferences when choosing which ratio to use for assessment.
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• Suryanshu RanjanJan 19, 2025 · 5 months ago
  In assessing the risk and return of digital assets, both the Sharpe ratio and Sortino ratio have their merits. The Sharpe ratio takes into account both the total return and the volatility of the asset, providing a measure of risk-adjusted return. On the other hand, the Sortino ratio focuses on the downside risk, making it more suitable for assets with asymmetric risk. Ultimately, the choice between these ratios depends on the specific characteristics of the digital asset and the investor's risk preferences. It is recommended to consider both ratios and other relevant factors when evaluating the risk and return of digital assets.
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