What Is Risk-adjusted return?

Risk-adjusted return is a calculation of the return (or potential return) on an investment such as a stock or corporate bond when compared to the amount of risk the investment has represented throughout a given period of time.

It is measured by taking into account the risk associated with an investment and comparing it to its return. The risk can be measured e.g. as a maximum drawdown.

See also

• Risk-free rate

• Best trading strategy

• Cumulative profit

• Equity curve

• Drawdown

• Maximum drawdown

• Quantstats

• Profitability calculations