Sharpe Ratio Calculator

Sharpe ratio is a way to examine the performance of an investment with respect to its investment risks. It is also known as sharpe index, sharpe measure or reward-to-variability ratio. It is used to compare the change in portfolio's overall risk-return characteristics. Here is the simple online Sharpe ratio calculator which calculates the Sharpe ratio for the given inputs of expected portfolio return, portfolio standard deviation, and risk-free rate.

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Sharpe ratio is a way to examine the performance of an investment with respect to its investment risks. It is also known as sharpe index, sharpe measure or reward-to-variability ratio. It is used to compare the change in portfolio's overall risk-return characteristics. Here is the simple online Sharpe ratio calculator which calculates the Sharpe ratio for the given inputs of expected portfolio return, portfolio standard deviation, and risk-free rate.

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Formula:

Sharpe Ratio = (Expected portfolio return - Risk free rate) / Portfolio standard deviation

Example:

Calculate the Sharpe ratio of an investment in which its expected portfolio return would be 10%, risk-free state is 5% and portfolio standard deviation be 20 %.

Solution:

Sharpe Ratio = (10 - 5) / 20
= 0.25


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