Credit: WUSA Therefore, the absolute risk reduction is 10/100 minus 1/100 which equals 9/100 or a 9 percent reduction. If you compare those two numbers, that's a nine percent difference.

Example One way to look at absolute return versus relative return is in the context of a market cycle, such as bull versus bear. In a bull market, 2% would be seen as a horrible return.

Relative performance is the comparison of the returns of your portfolio to that of some benchmark index. Absolute performance is the return of the portfolio itself on a year-over-year basis.

However, are you truly deprived if you receive a 50% discount? This is the difference, absolute and relative returns make. Let us discuss them in detail.

Therefore, the absolute risk reduction is 10/100 minus 1/100 which equals 9/100 or a 9 percent reduction. If you compare those two numbers, that's a nine percent difference.