| AA -- USA Stock | | ## USD 37.32 1.03 2.69% |

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Alcoa Corporation has current Treynor Ratio of 8.11. The Treynor is reward-to-volatility ratio that expresses the excess return to the beta of the equity or portfolio. It is similar to the Sharpe ratio, but instead of using volatility in the denominator, it uses the beta of equity or portfolio. Therefore the Treynor Ratio is calculated as [(Portfolio return - Risk free return)/Beta].

Alcoa | Treynor Ratio | **=** | ER[a] - RFR BETA |
| = | 8.11 | |

ER[a] | **=** | Expected return on investing in Alcoa |

BETA | **=** | Beta coefficient between Alcoa and the market |

RFR | **=** | Risk Free Rate of return. Typically T-Bill Rate |

## Treynor Ratio Comparison

Alcoa Corporation is rated

**second** in treynor ratio category among related companies. It is rated

**below average** in maximum drawdown category among related companies reporting about

0.39 of Maximum Drawdown per Treynor Ratio. The ratio of Treynor Ratio to Maximum Drawdown for Alcoa Corporation is roughly

2.53 This ratio was developed by Jack Treynor to measure how well an investment has compensated its investors given its level of risk. The Treynor ratio relies on beta, which measures an investment sensitivity to market movements, to gauge risk. The premise underlying the Treynor ratio is that systematic risk--the kind of risk that is inherent to the entire market (represented by beta)--should be penalized because it cannot be diversified away.