Sharpe Ratio Calculator
Calculate the Sharpe ratio to evaluate risk-adjusted investment performance by comparing excess return to volatility.
How to Use the Sharpe Ratio Calculator
- Enter portfolio annual return percentage.
- Enter the risk-free rate (e.g., T-bill rate).
- Enter portfolio standard deviation.
- Click Calculate.
Use Cases
- •Portfolio performance evaluation
- •Fund manager comparison
- •Risk-adjusted return analysis
Formula
Sharpe Ratio = (Rp - Rf) / σp
Frequently Asked Questions
What is a good Sharpe ratio?
A Sharpe ratio above 1 is considered good, above 2 is very good, and above 3 is excellent.
What does a negative Sharpe ratio mean?
It means the investment returned less than the risk-free rate, indicating poor performance.
Is this calculator free?
Yes, all calculators are completely free.