Sharpe Ratio Calculator
Risk-adjusted return of an investment or portfolio.
Enter your values
Enter the portfolio annual return in %.
Enter the risk-free rate in %.
Enter the portfolio standard deviation in %.
Results update instantly as you type — no submit needed. Your values are remembered on this device, and the shareable link reopens the calculator with exactly these numbers.
- Sharpe ratio
- 0.53
- Excess return over risk-free
- 8%
- Rating
- Subpar
Quick answer
A higher Sharpe ratio means better return per unit of risk taken; ratios above 1 are generally considered good, above 2 very good.
Sharpe = (portfolio return - risk-free rate) / standard deviation
At a glance
| What it does | Risk-adjusted return of an investment or portfolio. |
|---|---|
| Category | Investing |
| Inputs needed | Portfolio annual return, Risk-free rate, Portfolio standard deviation |
| Main output | Sharpe ratio |
| Formula | Sharpe = (portfolio return - risk-free rate) / standard deviation |
| Cost | Free — no sign-up, no download |
How to use the Sharpe Ratio Calculator
- 1Enter the portfolio's average annual return and its standard deviation (volatility) over the same period.
- 2Enter the risk-free rate (e.g., current T-bill yield).
- 3A higher Sharpe ratio means more return earned per unit of risk taken.
Inputs explained
- Portfolio annual return(%)
- Enter the portfolio annual return in %.
- Risk-free rate(%)
- Enter the risk-free rate in %.
- Portfolio standard deviation(%)
- Enter the portfolio standard deviation in %.
Worked example
Using the values the calculator loads with:
Inputs
- Portfolio annual return12 %
- Risk-free rate4 %
- Portfolio standard deviation15 %
Results
- Sharpe ratio0.53
- Excess return over risk-free8%
- RatingSubpar
Frequently asked questions
What counts as a good Sharpe ratio?
Above 1 is generally considered good, above 2 is very good, and below 0 means the investment underperformed the risk-free rate.
What are Sharpe ratio's limitations?
It assumes returns are normally distributed and penalizes upside volatility the same as downside, unlike the Sortino ratio.
What do I need to enter into the Sharpe Ratio Calculator?
Just 3 values: portfolio annual return, risk-free rate, portfolio standard deviation. Every field starts with a realistic example, so you can change one number at a time and watch the result update instantly.
How does the Sharpe Ratio Calculator work out the answer?
A higher Sharpe ratio means better return per unit of risk taken; ratios above 1 are generally considered good, above 2 very good. It applies the formula Sharpe = (portfolio return - risk-free rate) / standard deviation and shows the working so you can check each step by hand.
Is the Sharpe Ratio Calculator free, and do I need an account?
It is completely free with no sign-up, no download and no usage limit. Everything is calculated in your browser, so the numbers you type never leave your device.
Results are estimates for general information. For medical, legal, structural or financial decisions, confirm with a qualified professional.