Metrics

It's time you understood how each performance metric reflects risk and return in your investments. The Sharpe ratio treats all volatility equally, but Sortino focuses only on downside risk, making it more realistic. Calmar and MAR ratios reveal how much pain you endure for gains, using drawdowns-often the most dangerous factor investors ignore. You need to know which one actually aligns with your goals.Key Takeaways: Sharpe Ratio measures returns relative to total volatility but treats upside and downside swings the same, which can misrepresent risk for strategies with frequent positive outliers. Sortino Ratio improves on the Sharpe by focusing only…