How can I calculate the RDS for my cryptocurrency portfolio?

1 answers

• Jan 13, 2022 · 3 years ago
  Calculating the RDS (Risk-Adjusted Return) for your cryptocurrency portfolio is crucial for understanding its performance. Here's a step-by-step guide: 1. Gather the historical prices of each cryptocurrency in your portfolio and the corresponding dates. 2. Calculate the daily returns for each cryptocurrency by dividing the price change by the previous day's price. 3. Calculate the portfolio returns by weighting each cryptocurrency's daily return by its allocation in your portfolio. 4. Calculate the portfolio's standard deviation, which measures the volatility of the returns. 5. Determine the risk-free rate, which represents the return of a risk-free investment. 6. Finally, calculate the RDS using the formula: (portfolio returns - risk-free rate) / portfolio standard deviation. By following these steps, you'll be able to calculate the RDS for your cryptocurrency portfolio and gain valuable insights into its risk-adjusted return. Remember to regularly evaluate and adjust your portfolio based on this metric to optimize your investment strategy. If you have any further questions, feel free to ask!
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