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Author: Admin | 2025-04-27
During the same period.Following the Bitcoin acquisitions, Strategy’s stock volatility experienced a significant surge, reaching a standard deviation of 96.57% from August 2020 to February 2025.In contrast, Bitcoin’s standard deviation decreased to 62.16%, and the S&P 500’s to 16.5%. In simpler terms, the stock has become a riskier asset post-Bitcoin acquisition.While volatility is an important factor, it doesn’t paint the full picture. Risk-adjusted return metrics can also help assess whether an asset’s gains justify its risk.Sharpe Ratio: Measures returns relative to total risk by dividing excess return by standard deviation.Sortino Ratio: A variation of the Sharpe Ratio that only considers downside volatility, calculated by dividing excess return by downside deviation.Calmar Ratio: Compares annualized returns to maximum drawdowns, showing how well an asset recovers from steep declines.Martin Ratio: Similar to Calmar, but uses the Ulcer Index (which factors in both the depth and duration of drawdowns) instead of the maximum drawdown.Omega Ratio: Measures the probability of positive vs. negative returns, calculated as the ratio of returns above a threshold to those below it.IndicatorMSTR (1Y)S&P 500 (1Y)BTC (1Y)Sharpe Ratio (higher is better)3.081.771.21Sortino Ratio (higher is better)3.222.391.92Calmar Ratio (higher is better)4.252.660.94Martin Ratio (higher is better)14.6010.856.13Omega Ratio (higher is better)1.371.321.19As seen in the table above, Strategy outperformed both the S&P 500 and Bitcoin across all key risk-adjusted metrics from February 2024 to February 2025.The stock’s higher volatility post-Bitcoin adoption suggests increased risk, but its stronger risk-adjusted returns indicate that the market has rewarded the shift. Investors now face a scenario where Strategy’s stock displays higher volatility, but the potential returns validate the heightened risk. Bitcoin remains a high-risk, high-reward asset, but Strategy’s stock now offers an even more compelling investment case.Book Value of StrategyAnother important aspect to consider when evaluating Strategy is the book value of its stock. The book value represents the company’s
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