Sharpe ratio

Formally it is (return minus the risk-free rate) divided by the volatility of returns. A long-run Sharpe around 0.4-0.5 is roughly what broad equity indices deliver; sustained Sharpe above 1 from a simple public strategy should make you suspicious.

Sharpe has blind spots — it treats upside and downside swings the same and says nothing about crash depth — so we read it alongside max drawdown rather than instead of it.