Goldman Tweaks Sharpe Ratio To Project Future

The Goldman Sachs re-balanced Sharpe Ratio portfolio continues to outperform through a formula that considers future valuations and avoids the emotion and market chatter.

Stock selection modification is done by modifying Sharpe Ratio

The Goldman Sachs method to modify to select stocks is done by modifying the traditional Sharpe Ratio, a measure of risk and reward that measures upside and downside volatility to determine a risk reward profile of an investment. Goldman's modification to traditional use of the Sharpe Ratio is not as radical as many have proposed. Instead of providing a different risk weighting to upside deviation than downside deviation, the financial engineers at Goldman consider...