How to measure mutual fund risk | Must watch before investing

Here are some other ratios you can look at to compare risk of mutual funds:
A) R squared - This measures how a fund moves in comparison to a benchmark, i.e. some index like Nifty 50. So index funds will have a R-Squared value close to 100 while actively managed funds will have a range of values. Higher the R-Squared, more the fund behaves like an index fund.
B) Standard deviation - This measures the volatility of a fund and its highs and lows. If you are a risk-averse investor, go for less standard deviation since such funds are more predictable.
C) Sortino ratio - Similar to the sharpe ratio but unlike the sharpe ratio, it considers the standard deviation of negative portfolio returns only. A high sharpe ratio indicates less chances of negative portfolio returns and is better for conservative investors.
You can use ET money or Groww for this research. Share it with someone who might find it useful, and comment/DM if you have any questions!
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