Risk-reward ratio

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 ?
But the risk-reward ratio for shorting the US oil price has become much less attractive, which has in turn taken some of the heavy selling pressure out of the market.
But the risk-reward ratio favours conservatism, however outrageously Cook's ultra-adventurous opposite number Brendon McCullum chooses to dangle the carrot.
Hales, however, is prepared to take a chance on the basis of what he sees as a feasible risk-reward ratio.
All yoga poses can offer incredible health benefits when practiced appropriately, but the risk-reward ratio is not good for beginners, so it's best to err on the safe side at first," she said.
The exact amount of risk attached to a trade can be determined by using a risk-reward ratio to focus on both aspects of each trade.
And the risk-reward ratio is even more appealing for a horse lower down the pecking order who might make a name for himself.
Nothing is guaranteed and the risk-reward ratio is low.
This is a tribute to the quality and transparency of Mumtalakat, an attractive risk-reward ratio for lenders, sovereign ownership of the company, as well as the fact that this was Mumtalakat's debut syndication transaction.
Even if the government puts a thousand hours into building this case against Martha Stewart, the risk-reward ratio is enormously positive and constitutes a very prudent allocation of government resources.
We at Spencer Stuart know from the unprecedented 200-plus board searches we are now conducting that many desirable directors believe the risk-reward ratio of serving on a board is far from compelling.
The risk-reward ratio used to be so favorable to us; now it's shifted so far toward risk that some businessmen are turning down boardroom nominations.