the.com/sharpe ratio
tells you if your returns are genius or just leverage wearing a genius costume.
means a formula measuring how much return you earned per unit of risk taken, so 20% gains mean nothing without knowing how wild the ride was.
from created in 1966 by economist william sharpe, who later won a nobel prize for helping build the capital asset pricing model that this ratio quietly grew out of.
formula coreexcess return divided by volatility, that is it
above 1considered decent, above 2 considered excellent
blind spottreats all volatility as bad, even lucky upside swings
nobel yearsharpe won economics nobel in 1990