The Sharpe ratio allows you to see whether or not an investment has historically provided a return appropriate to its risk level. A Sharpe ratio above one is acceptable, above 2 is good, and above 3 is excellent. A Sharpe ratio less than one would indicate that an investment has not returned a high enough return to justify the risk of holding it. Interesting in this example, SPY's one year avg Sharpe ratio is above 3. This would mean on average SPY returns 3x better returns than the risk associated with holding it, implying there is some sort of underlying value to the investment.
When the sharpe ratio is above its signal, this implies the investment is currently outperforming compared to its typical return, below the signal means the investment is currently under performing. A negative Shape would mean that the investment has not provided a positive return, and may be a possible short candidate.
@Koko0111855, how did you solve an error on a line that does not exist?
The_ForexX_Mindset
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Actually there’s a secret to this which has not been explained. Explained in a simple way. What isn’t reveled is a plus to whoever knows how to use it and that determines when and how. Thank you for your hard work. Well done.