Sharpe vs. Sortino: The Key to Risk-Adjusted Returns in Quant Trading

🎯 Sharpe vs. Sortino Ratio: What's the Difference?

As a quant trader, you’ve probably heard of the Sharpe ratio, but have you considered the Sortino ratio? Let's break down the differences:

**Sharpe Ratio**: Measures risk-adjusted returns but penalizes both upside and downside volatility.
**Sortino Ratio**: Focuses only on downside risk, ignoring the good volatility you want!

So, which one should you use? Sharpe gives a broad picture, but if you’re concerned about minimizing losses, the Sortino ratio is your go-to metric for a deeper dive into downside risk.

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