Back index calculator

Calculate the back index for investment performance analysis. The back index measures the relationship between returns and volatility.

Input Parameters

Enter a comma-separated list of monthly returns

Calculation Results

Back Index Calculation

Back Index = [(Return - Risk-Free Rate) / Standard Deviation]²

Where:
Return = Average of monthly returns
Risk-Free Rate = Risk-free interest rate for the period
Standard Deviation = Volatility of returns

Average Return:

0.00%

Standard Deviation:

0.00%

Back Index:

0.00

Back Index Calculator Usage Guide

Learn how to use the Back Index Calculator for investment performance analysis

How to Use the Calculator

  1. Enter your monthly returns as a comma-separated list (e.g., 2.1, -1.5, 3.2, 0.8)
  2. Enter the risk-free rate for the period (e.g., 0.5 for 0.5%)
  3. Select the period type (monthly, quarterly, or annual)
  4. Click the "Calculate" button to compute the back index

Understanding the Back Index

The back index is a performance metric that measures the risk-adjusted return of an investment. It represents the square of the ratio between the excess return (return minus risk-free rate) and the standard deviation of returns.

The formula is: Back Index = [(Return - Risk-Free Rate) / Standard Deviation]²

Interpreting Results

  • A higher back index indicates better risk-adjusted performance
  • The back index is dimensionless and can be compared across different investments
  • Values greater than 1 typically indicate good performance

Example

Suppose you have monthly returns of 2.1%, -1.5%, 3.2%, and 0.8% with a risk-free rate of 0.5% (0.005).

1. Average return = (2.1 - 1.5 + 3.2 + 0.8)/4 = 1.1%

2. Standard deviation = 1.44% (calculated from monthly returns)

3. Back index = [(1.1% - 0.5%) / 1.44%]² = 0.357