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Portfolio Management 101
What is a Stock?
How to Choose a Stock
Active Trading vs Portfolio Management
How to start testing multiple strategies
What is Portfolio Management Strategy?
What is Diversification?
What is the Diversification Score?
How to Build a Basic ETF Portfolio
What are asset-classes?
What is Industry Exposure?
What is Geopolitical Exposure?
How to read impact on diversification
What is an ETF?
How to Choose ETFs
What is short selling?
What is a Bond?
What is an Option?
What is the Combined Score?
What is the Engagement Score?
Sharpe Ratio Challenge
Diversification Challenge
Market Basics Challenge
How do I measure performance?
What portfolio analytics are available?
How do I compare my portfolio to the benchmark?
What is Volatility?
What is Return?
What is Sharpe Ratio?
How to Improve Sharpe Ratio
How do I measure risk?
What are average excess returns?
What is a good Sharpe Ratio?
Credit-Suisse Recruitment Simulation
Preparing for recruitment
How to: use EquitySim to improve your recruitment potential
Showcasing your work on EquitySim
Designing a stand-out resume
Preparing for the S+T interview
STAR Structure for Behavioural Interview Questions
Interview Prep: Tell me about yourself
Interview Prep: Pitch me an Investment Idea
Interview Practice - Partner Exercise
Interview Prep: What to wear
White paper: Simulation-based hiring
Helping Fortune 500's hire diverse talent
Case Study: 2019 Credit-Suisse Results
2022 Credit-Suisse Challenge
2022 Financial Markets Campus Recruitment Insights
- All Categories
- Portfolio Management 101
- What is a good Sharpe Ratio?
What is a good Sharpe Ratio?
A Sharpe Ratio of 1 is considered good. Above 2 is considered amazing. A negative Sharpe Ratio is not considered good because that means your return is less than the risk-free investment (usually the US Treasury-bill).
However, it is quite dependent on the time frame you are measuring.
There are two pieces of time that are important.
How long you’ve been collecting all the data for your portfolio (how long you’ve been managing your portfolio)
What intervals you are using to count as a single data point (1d, 1w,1m,1yr)
Professionals have historical performance over the last 5 - 10 years and are measured annually. It is commonly thought that to have a Sharpe 2.0+ qualifies you to be a professional.
On EquitySim or learners don’t have more than 3 months of historical performance, and we measure it daily. Here, even achieving a Sharpe greater than 0.5 is challenging (less than 1% of our userbase can do this). Here’s a chart that we use to classify performance.
Check out this article if you want to gain a deeper dive on Sharpe:
How to Improve Sharpe Ratio