How much volatility is considered high in a fund? What is the standard for measuring fund risk? In fund investment, we often mention the risks of funds. What are the indicators to measure fund risks? Among the three most commonly used indicators to measure the risk level of a fund, they are standard deviation, Sharpe ratio, and maximum drawdown rate. General fund trading platforms will provide data on these three indicators. The standard deviation indicator of a fund, also called volatility, is a tool to measure the stability of fund fluctuations. It refers to the weekly (or monthly) return rate of a fund relative to the average weekly return ( or monthly return), the greater the fluctuation of fund income, the greater the standard deviation and the greater the risk. For example, the long-term performance of Fund A and Fund B is similar, but the net value of Fund A fluctuates greatly, while Fund B If it rises slightly, then, in the long run, the standard deviation of fund A will be larger than that of fund B, and the risk will be higher than that of fund B. The maximum retracement rate indicator of a fund refers to the maximum retracement rate of the fund's yield when the product's net value reaches its lowest point at any historical point in the selected period. Simply put, it can be used Describe the worst-case scenario that could arise after you purchase the fund. When other conditions are the same, the smaller the maximum retracement rate data, the better. The greater the retracement rate, the greater the fluctuation range of the net value. For investors who buy at a higher point, the magnitude of short-term losses will also be greater. larger. The fund's Sharpe ratio indicator, also known as the Sharpe index, is used to measure the fund's risk-adjusted ability to earn excess returns. The higher the value of the Sharpe ratio, the higher the excess return obtained by assuming a fixed risk. On the contrary, it means that the excess return obtained by assuming a certain risk is small or even non-existent. There are no absolute data standards for these risk indicators, because different fund types, different market conditions, and different operating styles have different standards for these indicators. However, we can make similar comparisons and compare several promising stocks of the same type. Funds are put together, and funds with smaller standard deviations, relatively higher Sharpe ratios, and smaller maximum drawdowns over a period of time are selected.