The signal-to-noise ratio of an analyst's forecasts. The ratio of alpha to residual standard deviation.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.
A measure of a fund or portfolio's performance calculated by taking its alpha (a measure of the fund's return, assuming the market return is zero) and dividing by its unsystemic risk or standard deviation. Generally speaking, money managers use the appraisal ratio to measure the fund's performance relative to some benchmark. They may change the composition of funds and portfolios with suboptimal appraisal ratios.
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