The Sharpe ratio is widely used to measure the risk-adjusted return (excess return per unit of total risk or standard deviation). It is the most appropriate indicator for evaluating the overall performance of a standalone investment like a newly established hedge fund, as it evaluates both systematic and idiosyncratic risk. Treynor’s ratio is better suited for well-diversified portfolios since it only measures return relative to systematic risk (beta). The information ratio is typically used for comparing active management against a specific benchmark.