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.
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These awards are a recognition of Fidelity's focus on delivering consistent performance and risk-adjusted returns based on our investment philosophy of bottom-up stock picking.
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The truly irreplaceable location of the 1880 Broadway Retail Condominium, strong sponsorship and exceptional risk-adjusted returns made this a highly sought after investment in both the debt and equity markets," adds Steve Kohn, president of Sonnenblick-Goldman.
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HRC marks another record year, closing $385m in deals
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Creating Value
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Colliers, AEW unite for office/retail buying spree

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