Treynor's vs Sharpe's

Now I know my ABC, next time won't you trade with me?
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panta_rhei
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Joined: Thu Jan 01, 2004 12:00 am

Treynor's vs Sharpe's

Post by panta_rhei »

Hey I've got a question:



Is it right, that if we compare two portfolios, and both are well diversified, these both measures don't lead to different conclusions?



However if they are not so well diversified and carry significant amounts of idiosyncratic risk, the treynor's measure is not adequate since it doesn't take that into account?



thanks for your help!
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