Portfolio Analytics
Treynor Ratio
Definition
What is Treynor Ratio?
Excess return divided by portfolioThe complete collection of investments owned by an investor or managed under one mandate. beta.
Example in practice
How This Looks in Practice
The ratio evaluates return earned per unit of market riskThe possibility of loss because broad market prices or rates move against an investment..
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Related Terms
Portfolio Analytics
Correlation
A statistic ranging from minus one to plus one that describes how two return series move together.
Portfolio AnalyticsPositive Correlation
A relationship in which two assets tend to move in the same direction.
Portfolio AnalyticsNegative Correlation
A relationship in which two assets tend to move in opposite directions.
Risk ManagementStress Test
An analysis of portfolio performance under severe but plausible scenarios.