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100 Highest Sharpe Ratio Stocks List this 2022: Your Investment Guide

The goal of most investors is to either: – Maximize returns given a fixed level of risk – Minimize risk given a particularly level of desired returns

Perhaps the best metric for analyzing both risk and return is the Sharpe Ratio. With that in mind, we’ve compiled a list of the 100 stocks in the S&P 500 Index with the highest Sharpe Ratios.

What Is The Sharpe Ratio?

The Sharpe ratio is the financial industry’s favorite measure of risk-adjusted returns. It tells investors whether they are being appropriately rewarded for the risks they’re assuming in their investments.

There are three components to the Sharpe Ratio calculation: – Investment return – Risk free rate of return – Investment standard deviation

For most investors, a suitable Risk-free rate of return is the current yield on 10-year U.S. government bonds.

For this article, we have used a risk free rate of 0, as interest rates have declined significantly.

For our purposes here, the Investment return can be either a historical return or an expected annual return. It is expressed using a decimal; for example, 0.51 would represent a 51% return.

The Sharpe ratio is calculated with the following formula:

Sharpe Ratio =

Investment Return - Risk Free Rate of Return

_________________________

Investment Standard Deviation

How To Use The Sharpe Ratios List To Find Compelling Investment Ideas

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