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.