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Fix risk-adjusted returns -> risk-adjusted return
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miohtama committed Mar 18, 2024
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Expand Up @@ -24,7 +24,7 @@ and algorithmic trading.

- Index investing

A trading strategy may look to optimise :term:`cumulative profit` or :term:`risk-adjusted returns`.
A trading strategy may look to optimise :term:`cumulative profit` or :term:`risk-adjusted return`.

Further strategies can be classified by their activity and risk profile as

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A trading algorithm can generally yield 5% - 300% yearly profit depending on the
amount of deployed capital and the market size. The goal is to beat :term:`risk-free rate`,
with :term:`risk-adjusted returns` having profits enough to cover any :term:`volatility` or other risk taken.
with :term:`risk-adjusted return` having profits enough to cover any :term:`volatility` or other risk taken.

In :term:`quantitative finance`, different trading strategies can be objectively compared
based on their performance metrics.
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Each of these terms offers a different lens through which to analyze market conditions and can be used in combination to make more informed trading or investing decisions.

When :term:`benchmarking <benchmark>` different :term:`portfolios <portfolio>` for :term:`risk-adjusted returns`, volatility is the fundamental
When :term:`benchmarking <benchmark>` different :term:`portfolios <portfolio>` for :term:`Risk-adjusted return`, volatility is the fundamental
metric for various risk vs. rewards calculations.

See also
Expand All @@ -4631,7 +4631,7 @@ and algorithmic trading.

- :term:`Trading strategy`

- :term:`Risk-adjusted returns`
- :term:`Risk-adjusted return`

Compound Annual Growth Rate (CAGR)

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