Cardano

Solana

Although the <a href="https://finbold.com/category/cryptocurrency-news/" rel="noopener noreferrer nofollow">cryptocurrency sector</a> has been going through a rough patch, its collective market capitalization <a href="https://finbold.com/crypto-market-sheds-20-billion-in-a-week-headed-below-1-trillion/" rel="noopener noreferrer nofollow">threatening to drop below $1 trillion</a>, some of its assets, particularly Solana (<a href="https://finbold.com/cryptocurrency/solana/" rel="noopener noreferrer nofollow">SOL</a>) and Cardano (<a href="https://finbold.com/cryptocurrency/cardano/" rel="noopener noreferrer nofollow">ADA</a>), have performed better than others in terms of risk-adjusted returns.Specifically, among the top altcoins by market cap, <a href="https://finbold.com/guide/how-to-buy-solana/" rel="noopener noreferrer nofollow">Solana</a> and <a href="https://finbold.com/guide/how-to-buy-cardano/" rel="noopener noreferrer nofollow">Cardano</a>, have recorded the highest year-to-date risk-adjusted returns for the period through May 3, as measured using the Sharpe ratio, according to the <a href="https://research.kaiko.com/insights/binance-halts-withdrawals-as-btc-fees-surge" rel="noopener noreferrer nofollow">data</a> published by <a href="https://finbold.com/guides/cryptocurrency/" rel="noopener noreferrer nofollow">crypto</a> market analysis platform Kaiko on May 9.<img src="https://academy-public.coinmarketcap.com/srd-optimized-uploads/52d862db78e74d5dabe5fc1aa943bc17.png" />Largest altcoins by market cap’s risk-adjusted returns. Source: <a href="https://research.kaiko.com/insights/binance-halts-withdrawals-as-btc-fees-surge" rel="noopener noreferrer nofollow">Kaiko</a><h2 id="header-0">What does this mean?</h2>As the platform’s analysts explained, “the Sharpe ratio measures the excess return of an asset per unit of volatility, with a ratio of 1 or above generally considered good.” Indeed, both Cardano and Solana had a Sharpe ratio of above 2, which means their <a href="https://finbold.com/guides/investing/" rel="noopener noreferrer nofollow">investors</a> are taking on lower risk compared to the reward.Following the two top performers are BNB (<a href="https://finbold.com/cryptocurrency/bnb/" rel="noopener noreferrer nofollow">BNB</a>) – the native token of the <a href="https://finbold.com/guide/cryptocurrency-trading/" rel="noopener noreferrer nofollow">crypto trading</a> platform <a href="https://finbold.com/review/binance-review/" rel="noopener noreferrer nofollow">Binance</a>, XRP (<a href="https://finbold.com/cryptocurrency/xrp/" rel="noopener noreferrer nofollow">XRP</a>) – the native <a href="https://finbold.com/cryptocurrencies/" rel="noopener noreferrer nofollow">cryptocurrency</a> of the <a href="https://finbold.com/topic/blockchain/" rel="noopener noreferrer nofollow">blockchain</a> company <a href="https://finbold.com/topic/ripple/" rel="noopener noreferrer nofollow">Ripple</a>, as well as the cross-chain protocol Polkadot (<a href="https://finbold.com/cryptocurrency/polkadot/" rel="noopener noreferrer nofollow">DOT</a>), scaling solution Polygon (<a href="https://finbold.com/cryptocurrency/polygon/" rel="noopener noreferrer nofollow">MATIC</a>), and peer-to-peer cryptocurrency Litecoin (<a href="https://finbold.com/cryptocurrency/litecoin/" rel="noopener noreferrer nofollow">LTC</a>), all with a Sharpe ratio of above 1.<h2 id="header-1">Meme coins are more risky?</h2>Meanwhile, meme-inspired digital assets Shiba Inu (<a href="https://finbold.com/cryptocurrency/shiba-inu/" rel="noopener noreferrer nofollow">SHIB</a>) and Dogecoin (<a href="https://finbold.com/cryptocurrency/dogecoin/" rel="noopener noreferrer nofollow">DOGE</a>) both have a Sharpe ratio of below 1, making them the poorest performers on the list of top altcoins by market cap in the sense of risk-adjusted returns. According to the Kaiko analysis:<blockquote>“In contrast, meme tokens like <a href="https://finbold.com/guide/buy-dogecoin-with-paypal/" rel="noopener noreferrer nofollow">Dogecoin</a> and <a href="https://finbold.com/guide/how-to-buy-shiba-inu-coin-shib/" rel="noopener noreferrer nofollow">Shiba Inu</a> have been the worst performers, with a ratio below 1. This implies that meme coin investors are taking on more risk relative to the compensation received.”</blockquote>That said, Solana and Cardano have had similar price trends in the past week as Dogecoin and Shiba Inu, as they all suffered losses. In fact, SOL declined 7.75%, ADA 7.97%, DOGE 7.51%, and SHIB 11.41% during that time.<img src="https://academy-public.coinmarketcap.com/srd-optimized-uploads/e620ab01dd71497082f9df562af522a0.png" />Solana 7-day price chart. Source: <a href="https://finbold.com/cryptocurrency/solana/" rel="noopener noreferrer nofollow">Finbold</a>However, interestingly, both DOGE and SHIB have witnessed slight increases over the previous 24 hours, climbing 0.52% and 0.88%, respectively, during which time SOL and ADA saw the opposite – the former dropped 0.27% and the latter 0.73% on the day.Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.Read more cryptocurrency news on <a href="https://finbold.com/category/cryptocurrency-news/?utm_source&#61;CMC&amp;utm_medium&#61;social&amp;utm_campaign&#61;CMC&amp;utm_content&#61;long" rel="noopener noreferrer nofollow">Finbold.com</a>

Investors take note: Solana and Cardano show low risk, high reward potential

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