Use the Python tool pandas to calculate and compare profitability and risk of different investments using the Sharpe Ratio.
When you assess whether to invest in an asset, you want to look not only at how much money you could make but also at how much risk you are taking. The Sharpe Ratio, developed by Nobel Prize winner William Sharpe some 50 years ago, does precisely this: it compares the return of an investment to that of an alternative and relates the relative return to the risk of the investment, measured by the standard deviation of returns. More details on this ratio here
In this project, I apply the Sharpe ratio to real financial data using pandas.
- Data: Stock exchange listings: nasdaq-listings.csv, with data on companies listed on the NASDAQ.