What is the process for calculating the Sortino ratio for digital currencies?

3 answers

• Hamza ElgaherJul 10, 2021 · 5 years ago
  To calculate the Sortino ratio for digital currencies, you first need to determine the average return and the downside deviation. The average return is the mean return of the digital currency over a specific period, while the downside deviation measures the volatility of negative returns. Once you have these two values, you can use the formula: Sortino ratio = (Average Return - Risk-Free Rate) / Downside Deviation. The Sortino ratio is a useful tool for evaluating the risk-adjusted returns of digital currencies, as it focuses on the downside volatility and provides a more accurate measure of risk compared to the standard deviation.
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• BalhadjApr 08, 2023 · 3 years ago
  Calculating the Sortino ratio for digital currencies involves a few steps. First, you need to determine the average return and the downside deviation. The average return is the mean return of the digital currency over a specific period, while the downside deviation measures the volatility of negative returns. Once you have these values, you can use the formula: Sortino ratio = (Average Return - Risk-Free Rate) / Downside Deviation. This ratio helps investors assess the risk-adjusted returns of digital currencies and make informed investment decisions.
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• Loy TeeApr 28, 2025 · a year ago
  The process for calculating the Sortino ratio for digital currencies is quite straightforward. First, you need to calculate the average return and the downside deviation. The average return is the mean return of the digital currency over a specific period, while the downside deviation measures the volatility of negative returns. Once you have these values, you can use the formula: Sortino ratio = (Average Return - Risk-Free Rate) / Downside Deviation. This ratio provides a more accurate measure of risk-adjusted returns for digital currencies, as it focuses on the downside volatility.
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