Shar

The Sharpe Ratio is a financial tool that measures how well an investment balances risk and return. It compares the extra profit (return) you earn from an investment to the amount of risk (volatility) involved. A higher Sharpe Ratio indicates that the investment provides better returns for the level of risk taken, helping investors evaluate whether a particular investment is worth it compared to others or a risk-free option. Essentially, it helps determine if the potential reward justifies the risk, aiding in more informed investment decisions.