The traditional Sharpe Ratio calculates the excess return of an investment by dividing it by its standard deviation, reflecting the volatility of the investment's returns.
When comparing the Adjusted Sharpe Ratio analysis to volatility, it becomes evident that TON's 7-day volatility consistently exceeds its 30-day volatility over the past two and a half years. This indicates that the TON price has been more susceptible to sudden swings in the short term compared to longer-term activity.
Furthermore, the speculative usage of the coin and the increasing number of Telegram users participating in DeFi and GameFi suggest a significant volatility impact on the token at a fundamental level. Speculators may refer to the adjusted Sharpe ratio for potential indicators of price fatigue (highlighted in red) or assumed higher return versus risk (highlighted in blue).
Currently, based on a 180-day Sharpe Ratio analysis, the price of TON has reached a level of fatigue, indicating a potential drawdown in price in the near term.
Written by ShivenMoodley
