SYS_EXTRACTION_INIT
DOWNLINKING VECTOR PARAMETERS
DECRYPTING CORE ALGORITHMS...
DECRYPTING CORE ALGORITHMS...
Audit the systematic risk. Calculate the Treynor Ratio to measure how much excess return a portfolio generates per unit of systematic risk (Beta).
While the Sharpe ratio uses total risk (volatility), the **Treynor Ratio** uses market risk (Beta). This makes it ideal for evaluating well-diversified portfolios where unsystematic risk has been eliminated. A higher Treynor ratio indicates better compensation for the unavoidable market risk taken.