Risk-adjusted return

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Risk-adjusted return

Often we subtract from the rate of return on an asset a rate of return from another asset that has similar risk. This gives an abnormal rate of return that shows how the asset performed over and above a benchmark asset with the same risk. We can also use the beta of the asset multiplied by the benchmark return to create a hypothetical asset that has the same risk characteristics. The difference between the asset return and the beta times the benchmark is the risk adjusted return and is also known as the alpha.

Risk-Adjusted Return

The return on an asset or investment relative to the return on assets and investments with similar risk. The risk-adjusted return can help an investor determine whether he/she is extracting the highest possible return for the least possible risk. One way to calculate the risk-adjusted return is to take the Sharpe ratio.
References in periodicals archive ?
The USD 198 million deal marks the debut of Funding Circle's US securitization sponsorship capability, and is the fifth securitization of Funding Circle business loans globally.??Funding Circle brings together industry-leading risk management policies and cutting-edge technology, enabling investors to earn attractive risk-adjusted returns by supporting established and creditworthy businesses.
As we have consistently stated, we will deploy capital opportunistically across organic and inorganic growth initiatives, share repurchases, and bolstering for ratings upgrades, as we seek the highest risk-adjusted returns for our shareholders.
These principles, combined with its dedication to providing clients with premier service, have enabled SSI to build a reputation for delivering competitive, risk-adjusted returns.
"Delivering superior risk-adjusted returns has enabled us to consistently attract new clients and build our wealth management business to more than $5.6 billion in assets under management," said Scott C.
Risk-adjusted returns are strained, as compression continues bearing down on underwriting margins, and investment yields offer little help.
The strategy seeks to avoid high financial risk and aims to enhance long-term risk-adjusted returns. Al-Jabri, who has been developing the PEI approach since 2013, recently oversaw the publication of a seminal SEDCO Capital white paper, entitled "How can Responsible Investors Benefit from Islamic Criteria?" which looked at the performance of responsible investments, Islamic investments and conventional portfolios across the US, Europe and Asian equity markets.
"Providing our clients with insider-level access to secure commercial investments that offer superior risk-adjusted returns and growth potential is the primary purpose in building this fund."
We are deploying approximately US$1.3bn at closing to significantly expand our utilities business in a sector and geography that we know well, where we will earn strong risk-adjusted returns."
"Daman's client-centric approach over the years has allowed us to deliver superior risk-adjusted returns and APX will help us further strengthen our investment management & client-reporting capabilities," said Farid Samji, Head of Asset Management at Daman Investments.
The risk-adjusted returns of their funds are 1.1% to 1.5% higher than those of other funds.
It seeks to provide consistent risk-adjusted returns over the medium to long term with low correlation to underlying market indices whilst preserving capital and minimising short-term volatility.
offers opportunities for value creation, healthy cash flows and favorable risk-adjusted returns. The level of Canadian investment is highly correlated with the health of the American economy and exchange rates, but the overriding motivation is that Canadian institutional investors need to look beyond their borders to find product and achieve greater diversification."

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