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Tag: Calculating IR

An investor juggles multiple portfolios and a benchmark index to illustrate the Information Ratio concept: evaluating portfolio performance versus a benchmark.

Understanding the Information Ratio: Measuring Excess Returns and Consistency

January 2, 2025 FinanceFacts101 Finance Policy

Introduction and Overview of Information Ratio (IR) The information ratio (IR) is an essential tool used in the world of finance and investment management for assessing a portfolio manager’s ability to generate excess returns compared to a selected benchmark, typically an index like the S&P 500. In essence, it measures

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