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fin.invest-sharpe Calculator
Calculates the Sharpe ratio (excess return per unit of total risk) from portfolio return, risk-free rate, and standard deviation. A Sharpe ratio above 1.0 is considered good; above 2.0 is excellent — it's the most widely used risk-adjusted performance metric.
Inputs
Port Return
Reference formula or conversion factor shown for context.
Risk Free
Return on a theoretically safe investment like a government T-bill. The baseline return everything else is compared against. Enter as a decimal (e.g. 0.05 for 5%).
Volatility
Annualised standard deviation of returns, as a decimal (e.g. 0.2 for 20%). Higher volatility increases option value. Implied vol is derived from market prices.
Results
Sharpe ratio
Risk-adjusted return: (portfolio return − risk-free rate) / standard deviation. Above 1: good. Above 2: very good. Above 3: excellent. Below 0: worse than the risk-free rate.
excess return
Sample size or count used in the calculation.
rating
A standardised quality or risk rating on the applicable scale.