Question: Obviously a negative Sharpe ratio is undesirable from a performance perspective, but in certain market environments, negative Sharpe ratios are quite common. Would you prefer

Obviously a negative Sharpe ratio is undesirable from a performance perspective, but in certain market environments, negative Sharpe ratios are quite common. Would you prefer to have been the manager for a portfolio, which had a -0.5 Sharpe ratio, or a portfolio, which had a -1.0 Sharpe ratio? There may be exceptions to the rule, but explain your answer. Could it be possible to make an incorrect decision as to which portfolio might be preferred when you are using negative Sharpe ratios?

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