Derivatives & Risk

What is the Sharpe ratio and how is it used to measure risk?

The Sharpe ratio measures how much return a portfolio earns for each unit of risk taken, calculated as the return above the risk-free rate divided by the standard deviation of returns. A higher ratio means more reward per unit of volatility. For example, two strategies returning 12% are not equal if one swings far more, and the Sharpe ratio separates them. It lets investors compare risk-adjusted performance rather than headline returns alone. Judging strategies on risk-adjusted terms, not raw gains, is central to disciplined allocation and to how Qatobit documents its index methodology. Read it to see the lens in use.

Crypto investments are subject to market risk and volatility. Past performance is not indicative of future returns. This is general information, not investment advice — consider your own circumstances or consult a qualified adviser before investing.