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What is Treynor Ratio?

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Treynor Ratio

Excess return divided by beta. It evaluates performance using only market risk, leaving out individual risk that can be removed by diversification. It is meaningful when comparing well-diversified portfolios, and its interpretation is distorted when holdings are concentrated in a few instruments.

Treynor Ratiogainbetareturn against the share that moved with the market (beta)

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Treynor Ratio meaning — Trading glossary | MarketSurfer