Generally speaking, the Sharp ratio is relatively good only when it exceeds 1, but this kind of investment opportunity is not common in simple investment, so professional investors will also use hedging to convert their investments and improve the Sharp ratio.

Sharp ratio has become the most commonly used index to measure fund performance. Simply understood, Sharp ratio is the excess return of unit risk, similar to the common cost performance in daily life.

Matters needing attention in using Sharp ratio fund:

When the expected return of the fund is negative, the Sharp ratio is also negative. In this case, the Sharp ratio of some risky funds may be higher. Therefore, when the expected return of the fund is negative, the Sharp ratio of the fund cannot accurately reflect the risk coefficient of the fund. The higher the Sharp ratio of the fund, the better for investors. The higher the Sharp ratio, the higher the risk return of fund unit risk.

For example, if the Sharp ratio is 1, the expected return will increase 1% for every increase in investment risk. If the Sharp ratio is 1.5, the expected return will increase by 1.5% for every increase in investment risk.