Ratio of Treynor

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Introduction

Jack Treynor is an economist who is 1965 created the following ratio, which bore its name " ratio of Treynor" (also called reward to Volatility Ratio ).

Formulate and explanations

Ti = \ frac {(IH - RF)}{Bi}

Ti is the ratio of Treynor, IH is the profitability of wallet I, RF is the rate without risk, Bi is the Beta wallet I.

The higher this ratio is, the more the wallet has an interesting profitability compared to the incurred risk.

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