Sharpe Ratio Calculator for Various Time Periods

Calculate the Sharpe Ratio to evaluate investment performance by adjusting for risk. This calculator can be used to compare different investment strategies over various time periods.

Input Parameters

Calculation Results

Calculation Formula

Sharpe Ratio = (Mean Portfolio Return - Risk-Free Rate) / Standard Deviation of Portfolio Returns

Where:
Mean Portfolio Return = Average of monthly portfolio returns
Risk-Free Rate = Annual risk-free rate (annualized)
Standard Deviation = Square root of the variance of monthly portfolio returns

Mean Portfolio Return:

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Annualized Sharpe Ratio:

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Monthly Standard Deviation:

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Sharpe Ratio Calculator for Various Time Periods Calculator Usage Guide

Learn how to use the Sharpe Ratio Calculator for Various Time Periods calculator and its working principles

How to Use the Calculator

  1. Enter your portfolio returns as a comma-separated list of monthly returns. For example: 5.2, 3.1, -1.5, 2.8, 4.2
  2. Enter the annual risk-free rate (e.g., 1.5 for 1.5%)
  3. Enter the time period in months for which you have returns data
  4. Click the "Calculate" button to compute the Sharpe Ratio and other metrics

Understanding the Sharpe Ratio

The Sharpe Ratio measures the performance of an investment compared to a risk-free asset, after adjusting for its risk. It is defined as:

Sharpe Ratio = (Mean Portfolio Return - Risk-Free Rate) / Standard Deviation of Portfolio Returns

A higher Sharpe Ratio indicates better risk-adjusted performance. Generally, a Sharpe Ratio above 1.0 is considered good, while above 2.0 is excellent.

Example

Suppose you have the following monthly returns for your portfolio: 5.2%, 3.1%, -1.5%, 2.8%, 4.2% and the annual risk-free rate is 1.5%. The calculator will compute:

  • Mean Portfolio Return
  • Standard Deviation of Portfolio Returns
  • Annualized Sharpe Ratio