Sharpe Ratio Challenge

Description: In this challenge, you will examine risk and return separately in order to understand the relationship between the two. You will need to learn how to balance both to maximize the Sharpe ratio. By the end of this challenge, candidates should have a qualitative and quantitative understanding of how to use the Sharpe Ratio to evaluate risk vs return tradeoff decisions.

Objective: Minimize Volatility, Maximize Return, Maximize Sharpe Ratio

Score Weighting:

25% Volatility

25% Return

50% Sharpe Ratio

Starting Capital: $1,000,000 USD

Restrictions: Day trading is restricted.

Resources that will help you:

  1. What is Sharpe-Ratio?

  2. What is Volatility, and how is it calculated?

  3. What is Average return, and how is it calculated?

  4. Sharpe Ratio: Where do I start?

How did we do?

Diversification Challenge

What is the Combined Score?

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