FoxScore

Return/Vol Ratio

1Y return relative to volatility

Description

This metric is simple: it relates the 1-year return to volatility.

Two assets can deliver the same return — the one with less volatility looks more efficient/stable.

Source
Calculation
  • 1) 1-year return (ret_1y)
  • 2) Annualized 365d volatility (vol_365d_ann)
  • 3) ret_1y / abs(vol_365d_ann)
Interpretation
  • Higher is better.
  • Very high values can occur when volatility is extremely low — in that case it’s worth checking drawdowns as a sanity check.
Ranking
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