• Home
  • Courses
    • NSE Academy Certified Courses
      • Capital Market Analytics
      • Certified Program on Intraday Trading Strategies
      • Advanced Technical Analysis
      • Advanced Options
      • Advanced Algo Trading
      • Advanced Fundamental Analysis
      • Advanced Risk Management
      • Algorithmic Trading & Computational Finance using Python & R
    • TC Courses
      • FSM 1.0
      • FSM 2.0
      • Mentorship Program
  • Learning Center
    • Financial Education
    • IPO Issues
    • Fundamental Analysis
    • Technical Corner
    • Options Corner
    • Risk Management
  • Screener
  • Emerging Leaders
  • Terminal
  • Subscribe
Have any question?
7718989954
info@tradingcampus.in
Login
Trading CampusTrading Campus
  • Home
  • Courses
    • NSE Academy Certified Courses
      • Capital Market Analytics
      • Certified Program on Intraday Trading Strategies
      • Advanced Technical Analysis
      • Advanced Options
      • Advanced Algo Trading
      • Advanced Fundamental Analysis
      • Advanced Risk Management
      • Algorithmic Trading & Computational Finance using Python & R
    • TC Courses
      • FSM 1.0
      • FSM 2.0
      • Mentorship Program
  • Learning Center
    • Financial Education
    • IPO Issues
    • Fundamental Analysis
    • Technical Corner
    • Options Corner
    • Risk Management
  • Screener
  • Emerging Leaders
  • Terminal
  • Subscribe

Risk Management

  • Home
  • Blog
  • Risk Management
  • Risk Adjusted Return

Risk Adjusted Return

  • Posted by Trading Campus
  • Date March 30, 2017
  • Comments 2 comments

Risk adjusted return tells us about the return generated from an investment with a given level of risk .It gives an insight to the investor to differentiate between the high risk and low risk investments ,so that the investor can make an appropriate choice of his investment. The risk adjusted return is very important for the investors to figure out if they are realizing maximum returns with a certain minimal level of given risk. Risk adjusted returns are calculated in case of individual stock, security, portfolio or when investing in a fund consisting of several classes of assets.

Some of the risk adjusted return calculation measures which are used to calculate returns on a given level of risk are as follows :

  • Sharpe ratio : Sharpe ratio = (Mean portfolio return – Risk free rate)/Standard deviation of portfolio return
  • Treynor’s ratio : (Average Return of a Portfolio – Risk free rate)/Beta
  • The higher the sharpe and treynor’s ratios, the better is the risk adjusted return per unit of risk.
  • Alpha : It tells you whether the return on portfolio has outperformed the market with a certain given level of risk. If the alpha is equal to positive 1 ,it means that the stock has outperformed the market index by 1 percent ,a negative 1 alpha would mean underperforming by 1 percent.
  • Beta: It is the measure of volatility which tells how much risk is involved with an investment compared to the market risk . A beta of 1.3 would mean stock is 30 % more volatile than the market risk (taken to be one )
  • R squared :It tells the correlation between a portfolio’s price movements with a benchmark (some market benchmark).Investors are interested in this because it explains portfolio’s performance based on the market movements .Measured between 1 to 100. Value between 70 % to 100 % suggests a high correlation .values lower than 40 % suggests lower correlation.
  • Standard deviation : It explains variation of returns of portfolio from it’s mean returns over a period of time .Suppose the return generated on a portfolio over a period of 5 years is 12 % with a standard deviation of 5 ,the investor then can reasonably expect portfolio to generate returns between  7 % to 17 % (plus minus 5 of 12%)

 

These different means of calculating risk adjusted returns are used as per individual discretion , and is used simultaneously to take investment decisions on all the measures together.

  • Share:
author avatar
Trading Campus
We provide courses in Share Market Training certified by NSE Academy. Get Adequate knowledge through our classroom courses.

Previous post

How to do Financial Planning?
March 30, 2017

Next post

VALUE AT RISK
March 31, 2017

You may also like

Arithmetic Operators
12 May, 2021

There are around 7 arithmetic operators available in python. These are called as binary operators because they act on two operators. a = 13, b = 5 Operator Meaning Example …

Operators in Python
11 May, 2021

An operator is a symbol that performs an operation. Some examples of operations are addition, subtraction, multiplication etc. a + b is an operation where a,b are operands and ‘+’ …

Bear Call Spread
23 December, 2020

Bear call spread is an option strategy used by traders to cap their maximum loss. At first, a trader is bearish with the downside capped, so he initiates a sell …

    2 Comments

emerging leader

  • Basics of Python
  • Emerging Leaders
  • Financial Education
  • Fundamental Analysis
  • Investment Ideas
  • IPO Issues
  • Nifty 50
  • Options Corner
  • Risk Management
  • Technical Corner
  • Uncategorized

Past Batches

December 2018 – Completed

March 2019 – Completed

July 2019 – Completed

November 2019 – Completed

January  2020 – Running

Get Updates

Subscribe to our mailing list and get learning stuff and updates to your email inbox
Loading

Accordions

Company Summary

Bajaj Electricals Limited is engaged in engineering and projects; power distribution, illumination and consumer durables businesses.

It has a range of domestic and kitchen appliances comprising water heaters, room heaters, coolers, irons, mixers, induction cookers, toasters, kettles, microwave, rice cookers, gas stoves, non-electrical kitchen aids and pressure cookers.

It offers ceiling, table, pedestal, wall, fresh air and industrial fans, and lighting solutions, such as light sources, light emitting diode-based lighting products, domestic luminaires, torches and lanterns.

Key Highlights of Company Business

Segments and Products

The Company's business segments consist of

  1. Lighting;
  2. Consumer Durables;
  3. Engineering & Projects,

The Lighting segment includes lamps, tubes and luminaries.

The Consumer Durables segment includes appliances and fans.

The Engineering & Projects segment includes transmission line towers, telecommunications towers, highmast, poles and special projects.

The Others segment includes diecasting and wind energy.

Financial Performance

Financial Ratios

Trading Campus

7718989954

info@tradingcampus.in

Company

  • About Us
  • Gallery
  • Team
  • Contact Us
  • Careers

Courses

  • Technical Analysis
  • Algo Trading
  • Options
  • Fundamental Analysis
  • Risk Management
  • Algo Trading using Python

Support

  • Learning Center
  • Forum
  • Login
  • Videos

Education WordPress Theme by ThimPress. Powered by WordPress.

Copyright © 2018 Trading Campus. All rights reserved.