Top 100 Sharpe Ratio Stocks List this 2022

The goal of most investors is to either: – Maximize returns given a fixed level of risk – Minimize risk given a particularly level of desired returns

Perhaps the best metric for analyzing both risk and return is the Sharpe Ratio. With that in mind, we’ve compiled a list of the 100 stocks in the S&P 500 Index with the highest Sharpe Ratios.

What Is The Sharpe Ratio?

The Sharpe ratio is the financial industry’s favorite measure of risk-adjusted returns. It tells investors whether they are being appropriately rewarded for the risks they’re assuming in their investments.

There are three components to the Sharpe Ratio calculation: – Investment return – Risk free rate of return – Investment standard deviation

For most investors, a suitable Risk-free rate of return is the current yield on 10-year U.S. government bonds.

For this article, we have used a risk free rate of 0, as interest rates have declined significantly.

For our purposes here, the Investment return can be either a historical return or an expected annual return. It is expressed using a decimal; for example, 0.51 would represent a 51% return.

We employ the calculated Investment standard deviation, usually based on daily variations, to take into account periodic fluctuations in the investment due to such things as dividends and stock splits.

Swipe up now to read the full post!