Ratios have always been an excellent way of analysing
financial performance, comparing and quantifying as they do the relationship
between two (or more) distinct parameters.
There are eight ratios we use to
assess a service's performance - Sharpe Ratio, Sortino Ratio,
Sterling Ratio, Strike Rate Ratio, Drawdown Ratio, Profit Factor,
Deviation Ratio and the Largest Win/Average Win Ratio.
Of these, the first three are similar
in that they are all risk-adjusted ratios - that is, they
all take risk into account in their calculations (though, as we will
see, they do this in different ways). And they all work off the same scale: a value equal to 0
is moderate, 1 is considered good, greater than 1.5 - 2 is very
good. Of course, the converse is true for negative figures.
The other Ratios we use focus on
different aspects of a service's performance. Some are proprietary
(Strike Rate and Deviation) while the others are well known ratios
that, together, give a detailed insight into a service's
performance.
