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Sharpe Ratio Calculator
Risk-adjusted return relative to total volatility.
Sharpe Ratio
0.53
The Sharpe ratio expresses excess return (return above the risk-free rate) per unit of volatility, making it possible to compare strategies with different risk levels on a like-for-like basis.
It treats all volatility as equally undesirable, including upside volatility — which is part of why the Sortino ratio exists as an alternative that only penalizes downside moves.
FAQ
What does the Sharpe ratio measure?
It measures return earned per unit of total risk taken, calculated as (portfolio return − risk-free rate) ÷ standard deviation of returns.
What's a good Sharpe ratio?
As a rough guide, above 1 is considered good, above 2 very good, and above 3 excellent — though appropriate benchmarks vary by strategy and asset class.