What are the key metrics to consider when comparing portfolio performance to benchmark in the digital currency market? 📈

3 answers

• Kishan AcharyaApr 24, 2024 · a year ago
  One of the key metrics to consider when comparing portfolio performance to a benchmark in the digital currency market is the return on investment (ROI). This metric measures the profitability of the portfolio in relation to the benchmark. A higher ROI indicates a more successful portfolio. Other important metrics include volatility, risk-adjusted returns, and correlation with the benchmark. These metrics help in assessing the risk and stability of the portfolio compared to the benchmark. Additionally, factors such as diversification, liquidity, and market capitalization should also be taken into account when evaluating portfolio performance.
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• Kehoe VaughanMay 27, 2024 · a year ago
  When comparing portfolio performance to a benchmark in the digital currency market, it is crucial to consider metrics such as alpha and beta. Alpha measures the excess return of the portfolio compared to the benchmark, indicating the portfolio's ability to outperform the market. Beta, on the other hand, measures the portfolio's sensitivity to market movements. A beta greater than 1 indicates that the portfolio is more volatile than the benchmark, while a beta less than 1 suggests lower volatility. These metrics provide insights into the portfolio's risk-adjusted performance and its ability to generate returns relative to the benchmark.
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• Raghvendra Pratap SinghDec 27, 2022 · 3 years ago
  In the digital currency market, comparing portfolio performance to a benchmark can be challenging due to the high volatility and unpredictability of the market. However, there are several key metrics that can help in this evaluation. One important metric is the Sharpe ratio, which measures the risk-adjusted return of the portfolio relative to the benchmark. A higher Sharpe ratio indicates better risk-adjusted performance. Another metric to consider is the maximum drawdown, which measures the largest loss the portfolio has experienced from a peak to a trough. This metric helps in assessing the downside risk of the portfolio. Additionally, metrics such as average return, standard deviation, and information ratio can also provide valuable insights into the portfolio's performance compared to the benchmark.
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