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 more help, visit Diversiview’s YouTube channel and check out our explanatory videos.