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What is the Treynor ratio?

What is the Treynor index and why is it important?

  • The higher the Treynor Index, the greater the excess return being generated by the portfolio per each unit of overall market risk. The Treynor Index is also known as the Treynor Ratio or the reward-to-volatility ratio.

What is Treynor ratio in keykey?

  • Key Takeaways. The Treynor ratio is a risk/return measure that allows investors to adjust a portfolio's returns for systematic risk. A higher Treynor ratio result means a portfolio is a more suitable investment.

What is the difference between Sharpe index and Treynor ratio?

  • The Sharpe Ratio (or Sharpe Index) is commonly used to gauge the performance of an investment by adjusting for its risk. , which adjusts return with the standard deviation of the portfolio, the Treynor Ratio uses the Portfolio Beta, which is a measure of systematic risk.

image-What is the Treynor ratio?
image-What is the Treynor ratio?
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