शार्प अनुपात कैलकुलेटर — सूत्र

The Sharpe Ratio

Developed by Nobel laureate William Sharpe, this ratio measures the excess return per unit of total risk.

Formula

Sharpe Ratio = (Rp - Rf) / Std Dev

Where:

  • Rp = Portfolio return
  • Rf = Risk-free rate (typically T-bill yield)
  • Std Dev = Standard deviation of portfolio returns

    • Interpreting Results

    The higher the Sharpe ratio, the better the risk-adjusted performance. Use it to compare investments, not in isolation.

    Limitations

  • Assumes returns are normally distributed
  • Does not distinguish between upside and downside volatility
  • Sensitive to the time period chosen

    • हल किया गया उदाहरण

    10% average return, 4.5% risk-free rate, 12% volatility.

    1. Excess return = 10% - 4.5% = 5.5%
    2. Sharpe ratio = 5.5% / 12% = 0.458
    3. This is a moderate risk-adjusted return
    4. For comparison, the S&P 500 has a long-run Sharpe near 0.4-0.5