What are the key factors that the Treynor measure formula considers when assessing the risk-adjusted returns of cryptocurrencies?

1 answers

• ixsploitSep 07, 2025 · 2 months ago
  The Treynor measure formula, which is widely used to assess the risk-adjusted returns of cryptocurrencies, takes into account two main factors. The first factor is the excess return of the cryptocurrency, which measures the return above the risk-free rate. This factor indicates the profitability of the cryptocurrency. The second factor is the beta of the cryptocurrency, which measures the volatility of the cryptocurrency's returns relative to the market. This factor reflects the riskiness of the cryptocurrency. By considering these two factors, the Treynor measure formula provides a holistic view of the risk-adjusted performance of cryptocurrencies, allowing investors to make informed decisions.
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