How do you measure investment risk?

Investment risk is the downside volatility that your investments could experience. In the research and development of our algorithms, we are looking for high degrees of stability. We also use a number of measures to evaluate and minimise risk. These include volatility, maximum draw down (peak to trough decline), Sharpe ratio (returns per unit of volatility), Sortino ratio (returns per unit of downside volatility), time stability (continuity of algo performance), correlation and diversification, alignment with the fund’s economic hypothesis, and many more.

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