PERFORMANCE

Sharpe Ratio Calculator

Calculate Sharpe Ratio and Sortino Ratio from your trading returns. Measure whether your strategy earns enough return for the risk you're taking.

Get an instant result with the exact inputs that matter for this metric.
Compare scenarios quickly (best case vs worst case) before taking action.
Understand what the output means and how traders/investors use it in practice.
Use it for planning and education — no login required.

Sharpe & Sortino Ratio Calculator

Paste your monthly/daily/weekly returns (% values) separated by commas, spaces, or new lines.

Returns Series (% per period)

20 data points loaded

Return Period

Risk-Free Rate (% p.a.)

Sharpe Ratio

1.43

Good

Sortino Ratio

2.94

Excellent

Annualised Return

23.29%

Avg period: 1.76%

Max Drawdown

3.10%

Volatility: 10.19%

Interpretation Guide

Sharpe Ratio Benchmark

> 2.0Excellent — institutional quality

1.0 – 2.0Good — acceptable for traders

0.5 – 1.0Average — needs improvement

< 0.5Poor — not worth the risk

Your Metrics

Data Points20

Std Deviation (period)2.94%

Downside Dev (period)1.43%

Risk-Free (period)0.54%

Excess Return (period)1.22%

DETAILS

About this Sharpe Ratio Calculator

This section explains what the calculator does, what goes into the result, and how to interpret the output so you can apply it confidently.

What this tool does

Purpose

This calculator turns a few key inputs into a clear output you can act on — a number that traders and investors commonly use for planning and decision-making.

Use it to compare scenarios quickly and to understand the trade-offs behind the final result.

When it is helpful

To sanity-check assumptions before committing money.
To compare two or more scenarios side-by-side (conservative vs aggressive).
To convert a “feel” into a number you can plan around.
To learn what the metric means and how it is used in practice.

How to read the result

Interpretation

Treat the output as a planning number. Small changes in inputs (time, rate, price, quantity, risk, or cashflows) can change the outcome meaningfully — so keep assumptions realistic.

If the tool returns multiple outputs, focus on the ones that drive decisions (e.g., net result, breakeven, or risk-adjusted value), not just the biggest number.

Common mistakes to avoid

Using overly optimistic return assumptions.
Ignoring fees/taxes where they matter.
Optimizing precision instead of making a better decision.
Treating the result as a prediction instead of a plan.

Example calculations and results

Example 1 (sample monthly series)

20 monthly returns, Risk-free 6.5% p.a., Period monthly

Avg return (per period)1.7600%

Std dev (per period)2.9412%

Sharpe1.4349

Sortino2.9415

Annualised return23.29%

Graphical view

Sharpe

1.43

Sortino

2.94

Example 2 (low-return series vs higher risk-free)

12 monthly returns around ~0.4%, Risk-free 6.5% p.a., Period monthly

Avg return (per period)0.4250%

Std dev (per period)0.5362%

Sharpe-0.7537

Sortino-0.8928

Annualised return5.22%

Graphical view

Sharpe

-0.75

Sortino

-0.89

If average return is below risk-free (per period), risk-adjusted ratios can turn negative.

HOW IT WORKS

Simple steps to get your result

Paste Your Returns

Enter your monthly/daily/weekly return % values, comma-separated or one per line.

Set Risk-Free Rate

Use the current RBI repo rate or 91-day T-bill yield (around 6.5%).

Get Risk-Adjusted Metrics

See Sharpe Ratio, Sortino Ratio, annualised return, max drawdown, and interpretation.

FAQ

Frequently asked questions

What is the Sharpe Ratio?+

Sharpe Ratio = (Average Return − Risk-Free Rate) / Standard Deviation × √Periods. It measures how much excess return you earn per unit of total risk. Higher is better.

What is the Sortino Ratio?+

Sortino Ratio only penalises downside volatility (negative returns), not upside volatility. It is a more fair measure for strategies that have high upside variance. A Sortino > 2 is excellent.

How is Sharpe different for traders vs investors?+

Investors benchmark against Nifty or FD returns. Traders compare strategies against each other. A trading strategy with Sharpe > 1.5 is considered good in quantitative trading.

Why does data quantity matter?+

Sharpe Ratio calculated from fewer than 12 data points is unreliable due to small sample bias. Use at least 2 years of monthly data (24+ points) for meaningful results.

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