Sharpe Ratio Calculator
Calculate the Sharpe ratio (risk-adjusted return) from a return series and risk-free rate. Paste portfolio returns to see mean return, standard deviation, and Sharpe ratio.
Periods
10
Mean return
0.400%
Std dev
0.713%
Sharpe (period)
0.5385
Sharpe (annualized)
8.5480
How to use the sharpe ratio calculator
Paste a return series (in percent — e.g. 0.5 for 0.5%). Set the risk-free rate (annual) and the periods per year (252 for daily, 12 for monthly, 4 for quarterly). Per-period and annualized Sharpe ratios are computed.
Formula & explanation
Sharpe = (Mean return − Rf per period) ÷ Std dev. Annualized = Sharpe × √(periods per year).
Examples
10 monthly returns averaging 0.4% with 0.8% std dev and 4% annual Rf: Sharpe ≈ 0.083/period, annualized ≈ 0.29.
Frequently asked questions
- Sharpe vs. Sortino?
- Sortino uses only downside deviation in the denominator. Sharpe penalizes upside volatility too; Sortino doesn't.
- Is a higher Sharpe always better?
- Higher means more excess return per unit of risk. Caveats: assumes normal returns and consistent risk-free rate.
Related investing & corporate finance tools
- NPV & IRR CalculatorCalculate net present value and internal rate of return for any series of cash flows. Enter a discount rate and yearly cash flows to evaluate whether an investment creates value.
- CAPM CalculatorCalculate the required return on equity using CAPM: risk-free rate + beta × equity risk premium. Used to estimate cost of equity for WACC and to assess whether a stock is fairly valued.
- Bond Pricing & YTMCalculate bond price, yield to maturity, Macaulay duration, and convexity for any fixed-coupon bond. Supports semi-annual and annual coupons — useful for fixed income analysis.
- WACC CalculatorCalculate weighted average cost of capital from equity cost, debt cost, tax rate, and capital structure weights. The standard discount rate for corporate DCF valuations.
- Black-Scholes Options PricingCalculate call and put option prices and all five Greeks (delta, gamma, theta, vega, rho) using the Black-Scholes model. Enter spot price, strike, volatility, rate, and expiry.