Definition
The Sharpe ratio compares the return of an investment with its risk. It's a mathematical expression of the insight that excess returns over a period of time may signify more volatility and risk, rather than investing skill. Economist William F. Sharpe proposed the Sharpe ratio in 1966 as an outgrowth of his work on the capital asset pricing model (CAPM), calling it the reward-to-variability ratio.
In Panel Profits
In the Panel Profits market platform, Sharpe Ratio: Definition, Formula, and Examples applies standard portfolio management principles to comic assets and physical collections.
Common mistakes
Do not infer unobserved prices.