Treynor Ratio
Published
The Treynor Ratio measures how much excess return (above risk-free rate) a portfolio earns per unit of systematic risk (beta).
It answers:
👉 “For every 1 unit of market risk I take, how much extra return am I getting?”
🔹 Interpretation
Higher Treynor Ratio = Better → means the fund is delivering more return per unit of market risk.
If Treynor Ratio is low or negative → fund isn’t rewarding investors for the risk.