The renewable energy sector is poised to see demand surge in the coming years, driven by government incentives and urgency to combat climate change. The biggest tailwind for the green industry comes from the Inflation Reduction Act, which was signed into law in August 2022 and carries about $370 billion in subsidies and credits for clean energy investment. While Tesla
TSLA
We note that TSLA stock has had a Sharpe Ratio of 0.9 since early 2017, which is better than 0.6 for the S&P 500 Index over the same period. This compares with the Sharpe of 1.3 for the Trefis Reinforced Value portfolio. Sharpe is a measure of return per unit of risk, and high-performance portfolios can provide the best of both worlds.
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