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fin.sharpe-ratio Calculator
Calculates the Sharpe ratio and Information ratio from portfolio return, benchmark return, risk-free rate, and standard deviation. The Information ratio measures active management skill — a consistent IR above 0.5 indicates genuine alpha generation beyond market beta.
Inputs
Portfolio 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%).
Std Dev
Reference formula or conversion factor shown for context.
Benchmark
Reference formula or conversion factor shown for context.
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.
quality
A qualitative assessment of how the result compares to the desired standard or benchmark.
info ratio
The proportional relationship between two quantities.
excess return
Sample size or count used in the calculation.
std deviation
Standard deviation -- the average spread of values around the mean. In a normal distribution: 68% within 1 SD, 95% within 2 SD.
Sharpe = (Rp-Rf)/sigma
Reference formula or conversion factor shown for context.