Sortino Ratio Explained: Why Downside Risk Beats Sharpe
The Sortino ratio measures returns per unit of downside risk, not total volatility. Here is the formula, a worked example, and when to use it.
sharpe ratio
Maximum Drawdown Explained: The Real Risk No Average Captures
Maximum drawdown is the worst peak-to-trough loss a portfolio has taken – the single number that captures the pain volatility hides.
Sharpe Ratio Explained: Measuring Risk-Adjusted Returns
How the Sharpe ratio works: the formula, a worked example, common pitfalls, and why William Sharpe himself warned against trusting a single number.