Monday, April 4, 2022

Understanding Beta, Std Dev, Sharpe Ratios

Saw an interesting youtube video today on some technical analysis tools and decide to do some further reading.

https://www.youtube.com/watch?v=OCT_XwOi0ME&t=881s

While I knew about beta long ago, I had only used it sparingly. My broker does not provide much technical details and analytical tools so I might consider using a better brokerage soon like Interactive Brokers. 

So far after fiddling for a few hours I have managed to sort out the beta part of my portfolio's data. 

At a Beta of 1.42 and breaking even with the SPY ytd, it seems that I might be having more volatility for little to no difference in return. 

I have not calculated sharpe ratio and std devs (almost impossible to get the accurate figures as I am not using a good brokerage. 

*edit - from March 25 (few days since i drafted this post) the market rallied strongly led by big tech again. My returns in this small rally does beat SPY. So beta does affect somethings, i just need to consciously make better decisions in future with this new knowledge as one of my screening tools.


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