Sharpe Ratio Calculator Template

Sharpe Ratio Calculator Template

This sharpe ratio calculator template demonstrates the calculation of sharpe ratio to determine an investment’s performance relative to risk.

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The Sharpe ratio is commonly used as a means of calculating the performance of an investment after adjusting for its risk. This allows investments of different risk profiles to be compared against each other.

In the Sharpe Ratio, a higher value means greater returns for the portfolio relative to the inherent risk. This also means a better investment. Because of the simplicity of the formula, the Sharpe Ratio can be used to evaluated a single stock, or an entirely diversified portfolio.

Sharpe Ratio formula

Sharpe Ratio = (Rx – Rf) / StdDev Rx

Where:

• Rx = Expected portfolio return
• Rf = Risk free rate of return
• StdDev Rx = Standard deviation of portfolio return / volatility

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