What question did this study set out to answer?

The aim is to develop a framework for comparing financial asset performance while controlling for risk and volatility.

March 18, 2026Open Access

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

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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