The latest articles on DEV Community by vihaanmekala-art (@vihaanmekalaart). https://dev.to/vihaanmekalaart https://media2.dev.to/dynamic/image/width=90,height=90,fit=cover,gravity=auto,format=auto/https:%2F%2Fdev-to-uploads.s3.us-east-2.amazonaws.com%2Fuploads%2Fuser%2Fprofile_image%2F3982868%2F041d7d43-8549-4851-88cc-4d7d44d8d23f.jpeg https://dev.to/vihaanmekalaart en vihaanmekala-art Sun, 14 Jun 2026 19:03:19 +0000 https://dev.to/vihaanmekalaart/how-to-find-the-risk-to-reward-of-a-stock-35b1 https://dev.to/vihaanmekalaart/how-to-find-the-risk-to-reward-of-a-stock-35b1 <p>In order to find the risk-to-reward of a stock, you use a simple metric called the Sharpe ratio. It is calculated as (r-rf)/rs.<br> r = returns<br> rf = risk-free rate (Typically US Treasury Bonds)<br> rs = standard deviation, also known as volatility.</p> <p>The higher the Sharpe ratio, the better bang you get for risk taken.<br> E.g: If NVDA returns 20%, the risk-free rate is 3%, and volatility was 10, then the Sharpe ratio would be 1.7. <br> Tools used - <a href="https://stochastics.vercel.app/" rel="noopener noreferrer">https://stochastics.vercel.app/</a></p> webdev typescript