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March 18, 20260 citationsOpen Access

Adjusted Return: A Method for Comparing Financial Assets at an Equal Risk Level

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MSMotty Shai

Key Points

  • The aim is to develop a framework for comparing financial asset performance while controlling for risk and volatility.
  • Introduced the Adjusted Return model for financial asset evaluation.
  • Utilized Annualized Negative Logarithmic Return as a normalization metric.
  • Established S&P 500 as a benchmark for comparison.
  • Demonstrated improved comparison across traditional and digital assets.
  • Showed that the model reveals true capital efficiency.
  • Verified that AR neutralizes asymmetric risk and volatility impacts effectively.

Abstract

This paper introduces the Adjusted Return (AR) model, a novel mathematical framework for normalizing financial asset performance using the Annualized Negative Logarithmic Return (ANLR). By establishing the S&P 500 as a universal benchmark anchor (100% ANLR), the model provides an objective scale for comparing disparate assets, from traditional equities to high-volatility digital assets and AI-driven strategies. The research demonstrates how AR uncovers true capital efficiency by neutralizing asymmetric risk and volatility drag.

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Cite This Study

Motty Shai (2026) studied this question.

synapsesocial.com/papers/69ba43a84e9516ffd37a521ahttps://doi.org/10.5281/zenodo.19050273
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