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> one that maximizes equity growth per dollar risked, or one
> that has the most consistent returns
Since we're talking extreme examples, if you buy something like a
t-bond, both of those limit out at infinity. There is zero risk on the
trade and there is zero stddev of returns so you divide by zero. In my
experience with real world investments, Sharpe and expectancy correlate
quite well. Both have profit as the numerator. The denominators of risk
and stddev are well correlated. Stddev is one of the tools used to
predict risk.
--
Dennis
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