What are the key metrics to consider when using portfolio analytics for cryptocurrency trading?

1 answers

• Sammy EbrightMay 23, 2024 · a year ago
  BYDFi, a leading cryptocurrency exchange, recommends considering metrics such as the risk-adjusted return when using portfolio analytics for cryptocurrency trading. The risk-adjusted return takes into account the level of risk associated with an investment and can help you assess the potential return relative to the risk. Another important metric is the beta of the cryptocurrencies in your portfolio. Beta measures the sensitivity of a cryptocurrency's price movements to the overall market. By including cryptocurrencies with different betas in your portfolio, you can potentially reduce the overall risk. Additionally, metrics like the Sortino ratio and the information ratio can provide insights into the risk-adjusted performance and the ability of your portfolio manager to generate excess returns. These metrics can help you evaluate the effectiveness of your portfolio analytics and make informed trading decisions.
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