How can the Treynor formula be applied to assess the risk-adjusted returns of digital currencies?

3 answers

• Panuwit MoungkernOct 31, 2021 · 4 years ago
  The Treynor formula is a popular tool used to assess the risk-adjusted returns of investments, including digital currencies. It takes into account the systematic risk, or beta, of an investment and compares it to the market risk premium. The formula is calculated by dividing the excess return of the investment by its beta. In the context of digital currencies, the Treynor formula can be applied by calculating the excess return of a specific digital currency and dividing it by its beta value. This allows investors to evaluate the risk-adjusted performance of digital currencies and compare them to other investment options.
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• Jason taylorJul 08, 2020 · 5 years ago
  The Treynor formula is a useful tool for evaluating the risk-adjusted returns of digital currencies. It considers the systematic risk, or beta, of a digital currency and compares it to the market risk premium. By calculating the excess return of a digital currency and dividing it by its beta, investors can assess its risk-adjusted performance. This formula helps investors make informed decisions about investing in digital currencies by taking into account both the potential returns and the associated risks.
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• Kamran AlakbarliMay 09, 2023 · 2 years ago
  When it comes to assessing the risk-adjusted returns of digital currencies, the Treynor formula can be a valuable tool. It takes into consideration the systematic risk, or beta, of a digital currency and compares it to the market risk premium. By calculating the excess return of a digital currency and dividing it by its beta, investors can determine its risk-adjusted performance. This formula provides a quantitative measure that can help investors evaluate the potential returns and risks of digital currencies in a systematic and objective manner.
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