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What Is Treynor Ratio In Sip And How To Calculate It?

  • The Treynor Ratio is a measure that helps investors understand how much excess return they are receiving for the extra volatility taken by holding a riskier asset.
  • SIP (Systematic Investment Plan) is a methodical way to invest in mutual funds, allowing investors to invest a fixed amount regularly.
  • To calculate the Treynor Ratio for SIP, determine the portfolio return, identify the risk-free rate, and calculate the portfolio beta.
  • The Treynor Ratio aids in assessing risk-adjusted performance, comparing SIP investments, and making informed decisions based on risk assessment.

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