Sharpe ratio
A measure of risk-adjusted return: (expected return − risk-free rate) / volatility. Higher is better. Galaxy Mind uses a 4.3% risk-free rate (3-month Treasury, mid-2026). The engine computes Sharpe at the portfolio level, factoring in correlation between sleeves.
How to read it
Sharpe asks how much return you earn per unit of volatility endured, above what cash pays risk-free. Below 0.5 the ride is poorly paid. Around 1.0 is solid. Above 1.5 is excellent and rarely persists. Its known blind spot: volatility counts upside swings as risk, which systematically understates explosive assets like bitcoin. Compare Sharpe between portfolios, never in isolation.
On Galaxy Mind
Every /fit recommendation reports a portfolio-level Sharpe computed against a 4.3% risk-free rate, the mid-2026 three-month Treasury yield, with sleeve correlations factored in rather than naively summed. It is the number that lets a Minimal income portfolio and a Ludicrous leveraged one be compared on the same axis.
Context
Despite its violence, bitcoin's long-run Sharpe has beaten most major asset classes across full cycles, the returns overpaid for the volatility. The engine's Minimal tier exists because of Sharpe logic: the income instruments deliver a smoother unit of return, exactly what a sleep-at-night mandate is actually asking for.