Which ratio, Sharpe or Treynor, is more suitable for measuring the risk-adjusted performance of digital currencies?

1 answers

• Nov 29, 2021 · 3 years ago
  As a representative from BYDFi, I would recommend considering both the Sharpe ratio and the Treynor ratio when measuring the risk-adjusted performance of digital currencies. The Sharpe ratio takes into account the total risk of an investment, including both systematic and unsystematic risk, while the Treynor ratio focuses solely on the systematic risk. By considering both ratios, investors can get a more comprehensive understanding of the risk-adjusted performance of digital currencies. However, it's important to note that these ratios are just tools and should not be the sole basis for investment decisions. Other factors such as market conditions, fundamental analysis, and investor risk tolerance should also be taken into consideration.
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