How-to: Company Pages
How to: Discovery
How-to: Portfolio Holdings
How to: Activity
How to: Leaderboard
How to: Performance
How to: Challenges
How to Trade
How to: use EquitySim to improve your recruitment potential
Fixing Account Errors
My Trade is not being processed
An investment in my portfolio is showing up as $0
Stock splits, mergers + acquisitions
I can't find a specific investment
I can't sign-up
My credit card is being declined
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
2021 Credit-Suisse Investment Challenge
Case Study: 2019 Credit-Suisse Results
Introduction to Challenges
2021 High School Investment Challenge
What is a Stock?
How to Choose a Stock
Active Trading vs Portfolio Management
How to start testing multiple strategies
What is an ETF?
How to Choose ETFs
What is short selling?
What is a Bond?
What is an Option?
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 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?
Host your own EquitySim Challenge
Asset Allocation (Assignment 1)
Activity 1: Trading Frequency and Returns
Activity 2: ETFs and Asset Allocation
Activity 3: Creating a Long Stock Pitch
Activity 4: Shorting, Correlation, and Hedging
Activity 5: Equities — Stop and Limit Orders
Can users share an account?
How do I export classroom data?
How do I delete, archive and edit my class?
Challenge Setting Types
How does EquitySim compare to other simulations?
What are Trading Strategies?
What are some basic Financial Vocabulary?
Recording your Strategies and Rationales
What is EquitySim?
Can I undo a trade?
How are prices determined in the simulation?
Why didn't my trade execute immediately?
How do I exchange currency?
Why isn't my ranking showing up?
What are Public Portfolios?
How do I switch between portfolios?
How am I Graded?
Does EquitySim have sample assignments for my curriculum?
How are Options priced in the simulation?
How do I find my daily portfolio change?
How do the Portfolio Emails Work?
Is my data confidential?
How do I delete my account?
How our simulations reflect the real-world
What can I trade on EquitySim?
What is a good rationale?
How to set-up your team
What are the different order types?
Which government bonds can I trade?
Sharpe Ratio measures your ability to create a larger return than your volatility.
A principle of investing is that there is a connected relationship between generating returns (profit) and taking risks. Sharpe Ratio is a formula that measures whether your returns are large enough to compensate for the amount of risk you are taking.
Sharpe Ratio - The Math
Sharpe Ratio Formula = (Average Portfolio Returns – Risk-Free Rate) ÷ Volatility
Average Portfolio Returns: The average of all your daily returns
Risk-free rate: The Daily return of the 3-month US Treasury Bill
Volatility: Standard deviation of daily portfolio returns
We built this calculator to help you visualize it better:
Tips to Keep in Mind
Tip #1: Remember that Sharpe Ratio uses your "average return" not your total returns. This means that how you perform each day matters. Set daily goals.
Tip #2: Master volatility. The volatility of your portfolio is easier to predict and control than the potential returns of your portfolio. If you can actively manage your volatility you are halfway through maximizing your Sharpe ratio.
Tip #3: Aim for consistency over one-time large gains. Sharpe Ratio rewards those who have a consistent pattern of generating returns over those making money due to a few big decisions.
Professionals should be able to generate a Sharpe Ratio of 2. On EquitySim aim for a Sharpe ratio that is greater than 0.5. This will not be a simple challenge, as less than 0.1% of EquitySim users can do this consistently.
note: Sharpe Ratio less than - 5.0, and greater than 5.0 is considered as system miscalculations and will show us as N/A.
To learn more about Sharpe Ratio you can reference these articles: