Hello Dear Investors,

This is the post that I am going to reference in my stock analysis articles so that it explains the terms that I am using.

## ๐ฆ๐ต๐ฎ๐ฟ๐ฝ๐ฒ ๐ฅ๐ฎ๐๐ถ๐ผ

The Sharpe ratio is used to help investors understand the return of an investment compared to its risk.

The ratio is the average return earned in excess of the risk-free rate per unit of volatility or total risk.

In simpler words, the ratio is the average return per unit of volatility.

Volatility is a measure of the price fluctuations of an asset or portfolio.

Generally, the greater the value of the Sharpe ratio, the more attractive the risk-adjusted return.

You can read more here:

## ๐ฆ๐ผ๐ฟ๐๐ถ๐ป๐ผ ๐ฅ๐ฎ๐๐ถ๐ผ

The Sortino ratio is a variation of the Sharpe ratio that differentiates harmful volatility from total overall volatility by using the asset's standard deviation of negative portfolio returnsโdownside deviationโinstead of the total standard deviation of portfolio returns.

The Sortino ratio takes an asset or portfolio's return and subtracts the risk-free rate, and then divides that amount by the asset's downside deviation.

You can read more about Sortino Ratio here:

## ๐ ๐ฎ๐ฟ๐ธ๐ฒ๐ ๐๐ผ๐ฟ๐ฟ๐ฒ๐น๐ฎ๐๐ถ๐ผ๐ป

Correlation is a statistical measure that determines how assets move in relation to each other.

It is measure