Lessons That Recent Market Volatility Unearthed

It turns out we can. In finance there's a metric called the Sortino Ratio. It measures return relative to downside volatility (a variation of standard deviation). A higher number is better than a lower number, but the number can get higher in a few different ways – returns can go up, downside volatility can go down, or both returns can go up and volatility can go down simultaneously. Higher returns by themselves are not enough to make the metric move, if they come with more downside volatility.