Risk-adjusted return
return earned on an asset normalized for the amount of risk associated with that asset. ...
Risk-adjusted return
Definition 1.
Often we subtract from the rate of return on an asset a rate of return from another asset that has similar risk.
Risk-Adjusted Return
A measure of how much money your fund made relative to the amount of risk it took on over a specific time period.
risk-adjusted return on capital - Related Articles
Risk-Adjusted Rate of Return
Calculations
Knowing an investment's risk-adjusted return goes a long way toward determining just how much 'bang for the buck' is really being generated.
Business Definition for: risk-adjusted return
Dictionary of Finance and Investment Terms
risk-adjusted return ...
risk-adjusted return on capital (RAROC)
An economic approach to measure unit and product profitability within a financial institution.
risk-adjusted return on capital A RAPM based on ROC.
risk-adjusted return on risk-adjusted capital A RAPM based on ROC.
risk arbitrage Merger arbitrage.
Risk-Adjusted Return On Capital is a key figure for measuring the risk/return ratio of banking operations. The risk-adjusted result, i.e. net earnings minus standard risk/costs is related to necessary or allocated risk capital.
Risk-Adjusted Return On Capital - RAROC
An adjustment to the return on an investment that accounts for the element of risk.
The risk-adjusted return is calculated by dividing a fund's return by its standard deviation then multiplying by the standard deviation of a relevant index.
P/E effect That portfolios with low P/E stocks have exhibited higher average risk-adjusted returns than high P/E stocks. Related: value manager. P/E ratio Assume XYZ Co. sells for $25.50 per share and has earned $2.55 per share this year; $25.
Related: Risk-adjusted return. Alpha equation Regression usually run over 36-60 months of data: Return-Treasury bill= alpha + beta (S&P 500 - Treasury bill) + error. The alpha is the intercept.
Sharpe ratio A measure of risk-adjusted return. To calculate a Sharpe ratio, divide an asset's excess returns (its return in excess of the return generated by risk-free assets such as Treasury bills) by the asset's standard deviation of returns.
Morningstar Rating For each fund with at least a three-year history, Morningstar calculates a Morningstar Rating based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a fund's monthly performance (including the ...
Modigliani risk-adjusted performance or M2 or M2 or Modigliani-Modigliani measure or RAP is a measure of the risk-adjusted returns of some investment portfolio.
Bond Coupon - Risk Free Return = Risk-Adjusted Return
You will not see the risk-adjusted return quoted anywhere because it is a theoretical concept, but try to apply it when making decisions.
A measure of an investment fund's risk-adjusted return. Alpha can be used to measure the value added (or subtracted) by a fund’s manager.
The Sharpe ratio measures the risk-adjusted return of a fund. Simply put, the ratio measures the variability of ' excess returns' (defined by returns of the fund over the 'risk less' 91 day T-bill).
It is useful in comparing two portfolios or stocks in terms of risk-adjusted return. The higher the Sharpe Ratio, the more sufficient are returns for each unit of risk.
An asset whose future return is uncertain.
Risk-adjusted return
Return earned on an asset normalized for the amount of risk associated with that asset.
Risk-free asset ...
A higher R-squared value will indicate a more useful beta figure. For example, if a fund has an R-squared value of close to 100, yet has a beta below 1, it is most likely offering higher risk-adjusted returns.
among traditional assets (such as stocks, bonds and cash) and alternative assets (such as hedge funds, managed futures, real estate, private equity and collectibles) in an effort to reduce overall portfolio risk and improve risk-adjusted returns ...
As I wrote back in about 2001, this whole notion that risk can be measured and that we can talk about risk-adjusted assets or risk-adjusted returns is so much nonsense. Certainly the European banks and their regulators measured the risk wrongly.
randomly favorable or unfavorable relative to expectations, changes in stock prices in an efficient market should be random, resulting in the well-known 'random walk' in stock prices. Thus, investors cannot earn abnormally high risk-adjusted returns ...
The expected excess return given the risk is 2 x 9%=18%. The actual excess return is 20%. Hence, the alpha is 2% or 200 basis points. Alpha is also known as the Jensen Index. Related: Risk-adjusted return.
R - research and development, R&D, random walk stochastic process, real return, research and development, return on equity, return on investment, risk-adjusted return, risk factor, risk premium, risk-free rate ...
 See also: Internal rate of return, Return On Equity, PIK, Payment-in-kind, Long-term debt ratio
  
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