How do you calculate Sharpe ratio?
Sharpe ratio equals return minus the risk-free rate, divided by volatility. Use matching annualized inputs when comparing investments.
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Sharpe Ratio Calculator
Calculate risk-adjusted return, then move into stock Sharpe pages, QQQ vs SPY comparison, portfolio Sharpe analysis, and methodology instead of treating the calculator as a dead end.
Risk-adjusted return
Calculate Sharpe ratio
Results use your return, risk-free rate, and volatility assumptions. They are calculation outputs, not forecasts.
Sharpe ratio
0.40
Weak risk-adjusted return
Excess return
6%
Return input
10%
Volatility input
15%
Formula
Sharpe ratio = (annual return - risk-free rate) / annual volatility
Use matching periods. Annual return, risk-free rate, and volatility should all be annualized before comparison.
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Sharpe Ratio research network
Ticker
AAPL Sharpe Ratio
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ContinueTickerNVDA Sharpe Ratio
Connect Nvidia volatility and return efficiency to NVDA research.
ContinueTickerQQQ Sharpe Ratio
Review QQQ as a growth benchmark for risk-adjusted return.
ContinueTickerSPY Sharpe Ratio
Use SPY as the broad-market Sharpe reference point.
ContinueCompareQQQ vs SPY Sharpe Ratio
Compare growth-heavy and broad-market return efficiency.
ContinuePortfolioPortfolio Sharpe Ratio
Connect single-asset Sharpe thinking to portfolio-level analysis.
ContinueMethodologyWhat Is a Good Sharpe Ratio?
Interpret Sharpe ranges and practical benchmarks.
ContinueMethodologySharpe Ratio Methodology
Learn the formula, assumptions, and limitations behind the metric.
ContinueGuideHow to Improve Sharpe Ratio
Use diversification and allocation changes to improve risk-adjusted return.
ContinueHow the Sharpe calculation works
Sharpe ratio measures excess return per unit of volatility. It is useful for comparing investments with different risk levels, but it should be paired with drawdown, concentration, and correlation evidence.
Input definitions
- Annual return
- The annualized return for the stock, ETF, strategy, or portfolio.
- Risk-free rate
- The return available from a low-risk cash or Treasury-like alternative.
- Annual volatility
- The annualized standard deviation of returns.
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What Is a Good Sharpe Ratio?
Interpret the result with practical Sharpe ranges and benchmark context.
Interpret SharpePortfolio Sharpe Ratio
Move from a single calculation to portfolio-level return efficiency.
View portfolio SharpeCompare QQQ vs SPY
Use a benchmark comparison to understand risk-adjusted return tradeoffs.
Compare benchmarksRelated calculators
Related tools are selected for the sharpe ratio calculator workflow.
Sharpe ratio calculator FAQ
What is a good Sharpe ratio?
A Sharpe ratio above 1.0 is often considered good, above 2.0 is very strong, and negative Sharpe means the return did not compensate for the risk-free alternative.
Is Sharpe ratio enough by itself?
No. Sharpe should be paired with maximum drawdown, concentration, correlation, and the investment time window.
Are calculator results forecasts?
No. The result is a scenario calculation from user-entered return, risk-free rate, and volatility assumptions.