About NorWatt > Investor Terminology

Absolute return

The absolute return or simply return is a measure of the gain or loss on an investment portfolio expressed as a percentage of invested capital. The adjective absolute is used to stress the distinction with the relative return measures often used by long-only equity funds.

Absolute return strategies aim to produce a positive absolute return regardless of the directions of financial markets. The return is not related to any index.

Diversification

Diversification in finance is a risk management technique, related to hedging, that mixes a wide variety of investments within a portfolio. Because the fluctuations of a single security have less impact on a diverse portfolio, diversification minimizes the risk from any one investment.

Net Asset Value (NAV)

The fair value of all positions and assets a company has, less all liabilities.

Sharpe ratio

The Sharpe ratio or reward-to-variability ratio is a measure of the excess return (or Risk Premium) per unit of risk in an investment asset or a trading strategy