Lam Research Treynor Ratio

LRCX Stock  USD 965.67  1.56  0.16%   
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Lam Research Corp has current Treynor Ratio of 0.2026. The Treynor is the 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].

Treynor Ratio

 = 

ER[a] - RFR

BETA

 = 
0.2026
ER[a] = Expected return on investing in Lam Research
BETA = Beta coefficient between Lam Research and the market
RFR = Risk Free Rate of return. Typically T-Bill Rate

Lam Research Treynor Ratio Peers Comparison

Lam Treynor Ratio Relative To Other Indicators

Lam Research Corp is rated second overall in treynor ratio category among related companies. It is currently under evaluation in maximum drawdown category among related companies reporting about  45.78  of Maximum Drawdown per Treynor Ratio. The ratio of Maximum Drawdown to Treynor Ratio for Lam Research Corp is roughly  45.78 
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.
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