Could someone explain the concept behind the M-Squared ratio formula, specifically addressing why the standard deviation of the market is multiplied by the Sharpe ratio? Additionally, which ratio provides the most accurate depiction of portfolio performance??

Im not a professional, but

Sharpe ratio is the most popular ratio used in the industry (mistake me if im wrong)

These ratios are all additions to one another. Each have their **limitations** **Assumptions**and **purpose**. the use of these ratios will depend on the scenarios.

The **Sharpe ratio** measures the excess of return per unit risk (standard deviation, since a high standard deviation may result in very mixed investment performance) While the **M squared** ratio compares portfolio performance against a **benchmark** by **adjusted the risk level** to the same level within portfolios. M-squared creates a common risk profile across the entirety of the portfolio.