Sharpe Ratio Calculator

As a rough guide, a Sharpe ratio above 1 is good, above 2 is very good and above 3 is excellent; below 1 the return is low for the risk taken. The ratio is most useful when comparing investments measured over the same period and the same way.

Sharpe ratio = (portfolio return − risk-free rate) ÷ standard deviation. Use the same period for every input, such as annual return and annual standard deviation.

A 15% return with a 3% risk-free rate and 10% standard deviation gives (15 − 3) ÷ 10 = 1.2, a good risk-adjusted return.

1. Enter your portfolio or expected return as a percentage.
2. Enter the risk-free rate (for example a Treasury bill yield).
3. Enter the standard deviation (volatility) of the returns.
4. Read the Sharpe ratio and its rating.

• Mixing periods — using an annual return with a monthly standard deviation.
• Forgetting to subtract the risk-free rate.
• Comparing Sharpe ratios from very different time horizons.

The Sharpe Ratio Calculator shows how much return your portfolio earns for each unit of risk it takes. It divides the return above the risk-free rate by volatility, so two investments can be compared on a like-for-like, risk-adjusted basis.

Investors, traders and analysts comparing funds, strategies or portfolios on a risk-adjusted basis.

• Turns raw returns into a fair, risk-adjusted score.
• Shows the excess return and volatility behind the number.
• Built-in rating from sub-optimal to excellent.
• Runs privately in your browser — no figures uploaded.

• Comparing two funds with different returns and volatility.
• Checking whether extra return justifies extra risk.
• Reviewing a strategy back-test before committing capital.