Sharpe Ratio Calculator
Enter annual return, risk-free rate and annual volatility to compute the Sharpe ratio.
Results
Fill in the inputs and click Calculate.
- Sharpe Ratio
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Risk disclaimer
This calculator provides estimates for informational purposes only; past Sharpe does not guarantee future results.
What does Sharpe measure?
Sharpe = (Annual Return − Risk-Free) ÷ Annual Volatility — excess return per unit of volatility.
Roughly, above 1 is decent and above 2 is strong; compare using the same annual basis.
How to use
- Enter the annual return in percent.
- Enter the risk-free rate and annual volatility in percent.
- Click Calculate to see the Sharpe ratio.
Formula
- Sharpe = (Annual Return − Risk-Free) ÷ Annual Volatility
Example
20% return, 2% risk-free, 25% vol → Sharpe 0.72.
With 15% vol the same return gives Sharpe 1.20.
FAQ
Units?
Return, risk-free and volatility all go in as percentages; the ratio is unitless.
Where does volatility come from?
It is the annualized standard deviation of returns; this tool uses the value you provide.
Can these calculations be executed automatically?
Yes. Work out the parameters and risk limits here first, then hand the same rules to a quant system such as CubeQuants so you don't have to place orders manually. Fills still depend on your exchange, so verify with a small size first.