Risk and Return: Making Sense of Statistical Measures


Alpha, Beta, R-Squared, Standard Deviation, and Sharpe Ratio are components of Modern Portfolio Theory (MPT).


Alpha (𝛂) is used to measure the performance of an investment on a risk adjusted basis. 

Beta (𝞫) is a measure of volatility relative to the benchmark index.

Standard Deviation is one of the most common measures to gauge volatility of a mutual fund or an ETF.

Sharpe Ratio measures risk-adjusted return of an investment.


How do you use these statistical measures to evaluate the performance of a fund or an ETF in your portfolio?


Read in Investors in Mind and Money’s White Paper Risk and Return: Making Sense of Statistical Measures.


Risk and Return Making Sense of Statistical MeasuresDownload