Sharpe ratio
A measure of the return earned for each unit of risk taken.
The Sharpe ratio divides a portfolio's return above the risk-free rate by its volatility. A higher ratio means more reward for the risk borne, and it lets portfolios of different risk levels be compared on equal terms.
The Sharpe ratio is a useful equaliser, letting a cautious portfolio and an aggressive one be compared on the reward each earns for its risk. Its weakness is that it assumes risk is well described by volatility, so read it alongside measures that capture rare, severe losses.