What is Treynor Ratio?
Treynor Ratio A risk-adjusted return metric that calculates excess return earned per unit of systematic risk (beta), measuring performance relative to market risk.
Source: CFA Institute, IFRS Foundation, FASB (GAAP), Basel III Framework
How is “Treynor Ratio” Used in Practice?
The Treynor Ratio is used to assess how much excess return a portfolio generates per unit of market risk, making it vital for evaluating diversified portfolios.
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Who Needs to Know This Term?
- Financial Analysts
- Bankers
- Traders
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What is Treynor Ratio?
A risk-adjusted return metric that calculates excess return earned per unit of systematic risk (beta), measuring performance relative to market risk.
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