Risk-reward ratio

(redirected from Risk Reward Ratio)
Also found in: Acronyms.

Risk-reward ratio

Relationship of substantial reward corresponding to the amount of risk taken; mathematically represented by dividing the expected return by the standard deviation.

Risk-Reward Ratio

The ratio of the standard deviation of an investment to its expected return. The higher the ratio is, the lower the return for the amount of risk one is taking. This can inform one's investment decisions. See also: Risk adjusted return on capital.
References in periodicals archive ?
A high risk reward ratio is what every trader should be aiming for.
It can scare the hell out of you and feel completely exhilarating all at the same time, the risk reward ratio is that equal.
In this case, Globex said it decided to acquire the El Transito Gold property outside of North America because of the obvious positive risk reward ratio.
While the risk reward ratio for general practitioners admittedly can be frustrating at times, working with the start-ups and the established small businesses may be the most satisfying thing we do in our practices.
The company's risk reward ratio advocates the purchase of its stock, despite the possibility of dilution.