Sharpe ratio is a widely used method for calculating the risk-adjusted return and a measurement of the portfolio’s performance per unit of portfolio’s volatility.
A portfolio that is well diversified will have a Sharpe ratio higher than a non-diversified portfolio, and investors generally look for a Sharpe ratio around or above 1.
You can find the Sharpe Ratio for your portfolio on your dashboard or the Diversiview analysis page, under the ‘Performance & Benchmark’ section. The table shows two values:
- The left value indicates the portfolio sharpe ratio of the current asset allocation.
- The right value indicates the portfolio sharpe ratio of the optimal asset allocation.
*For the purpose of Sharpe ratio calculations, Diversiview uses the index that you select from your profile settings. To learn how to select your preferred market benchmark, click here.
For more help, visit Diversiview’s YouTube channel and check out our explanatory videos.
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