The Big Story in bl.portfolio dated March 3, 2024, delved into the significance of statistical measures in investment decisions, stressing the crucial role of risk management for sustained success, as highlighted by Howard Marks of Oaktree Capital Management. Marks emphasized the need for constant risk control in investment strategies to safeguard capital from significant losses. The article presented five statistical tools for assessing and managing portfolio risk, including the Coefficient of Variation (CV), which compares volatility to average return, and the Sharpe and Sortino Ratios, which evaluate risk-adjusted returns. These tools provide investors with valuable insights into the risk-return relationship, enabling them to generate sustainable returns over the long term.
Source:
thehindubusinessline.com
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