How do Sortino ratio and Sharpe ratio affect the evaluation of risk and return in the cryptocurrency market?

1 answers

• Baf BafApr 07, 2025 · 5 months ago
  In the evaluation of risk and return in the cryptocurrency market, the Sortino ratio and Sharpe ratio are widely used. The Sortino ratio focuses on the downside risk and provides a measure of risk-adjusted return that takes into account the volatility of returns below a certain threshold. This ratio is particularly useful in assessing the risk of losses in the cryptocurrency market. On the other hand, the Sharpe ratio considers both upside and downside volatility, providing a measure of risk and return that takes into account the overall volatility of returns. By using these ratios, investors can compare the risk and return potential of different cryptocurrencies and make informed investment decisions. It's important to note that these ratios are just tools and should be used in conjunction with other analysis techniques to evaluate the overall risk and return profile of a cryptocurrency.
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