The method
How it is worked out
Sharpe = (return − risk-free rate) ÷ volatility
- volatility
- Annualised standard deviation of returns
- risk-free
- Short-dated government bill yield
Sharpe Ratio Calculator
Measure return per unit of risk for a portfolio or fund and compare it with a benchmark. The result updates as you type so you can compare scenarios quickly.
Keep in mind
What it leaves out
- PeriodThree years of data is a minimum; one year says little.
- Non-normal returnsSharpe understates the risk of rare large losses.
Use the calculator to compare scenarios rather than as a guaranteed forecast.
About the Sharpe Ratio Calculator
Measure return per unit of risk for a portfolio and compare it with a benchmark.
How it works and an example to tryShow less
How to use the result
Sharpe is return minus the risk-free rate, divided by volatility. The benchmark at your risk level scales its Sharpe by your volatility.
Example to try
11% return with 16% volatility against a 4% risk-free rate is a Sharpe of 0.44; a benchmark at 9% and 14% scores 0.36.
Put it to work
Try it on a real situation
Load an example
What moves the result most
Worked out from your figures above. Tap a row to try it.
Who uses it, and when
Investors comparing funds and portfolios, and anyone learning risk-adjusted return.
Mistakes worth avoiding
- Using one year of data.
- Comparing Sharpe ratios computed over different periods.
- Ignoring that rare large losses are understated.
Questions
What does the Sharpe Ratio Calculator do?
Measure return per unit of risk for a portfolio or fund and compare it with a benchmark.
How should I use the result?
Sharpe is return minus the risk-free rate, divided by volatility. The benchmark at your risk level scales its Sharpe by your volatility.
Does TechBullion store the information I enter?
The core calculation or transformation runs in your browser. Normal website security and analytics may still record page-level events, but the tool does not need to create a public record from your inputs.
What mistakes do people make with a sharpe ratio calculator?
Using one year of data. Comparing Sharpe ratios computed over different periods. Ignoring that rare large losses are understated.
Is the result guaranteed?
No. Use the result as a practical check or planning aid and verify important decisions with the relevant primary source, provider or professional advice.
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Results are estimates based on the figures entered, for general information only, and not financial, investment, tax or legal advice. See our terms of use.