Sharpe Ratio Calculator
Measure how much return your portfolio earns per unit of risk. A higher Sharpe Ratio means better risk-adjusted performance.
Annualised return of your portfolio over the period
Return from a risk-free asset like government bonds
Annualised volatility (find this on your fund/broker dashboard)
Sharpe Ratio Formula
Sharpe = (Rp − Rf) ÷ σp
Rp = Portfolio Return Rf = Risk-Free Rate σp = Std Dev
Enter values to calculate Sharpe Ratio
Frequently Asked Questions
What is the Sharpe Ratio?
The Sharpe Ratio, developed by Nobel laureate William Sharpe, measures how much excess return you receive for each unit of risk you take. A higher ratio means better risk-adjusted performance.
What is a good Sharpe Ratio in India?
For Indian equity mutual funds, above 1.0 is acceptable, above 1.5 is good, and above 2.0 is excellent. Large-cap funds typically show ratios between 0.8–1.5.
What risk-free rate should I use for India?
The 10-year Government Security (G-Sec) yield is the standard risk-free rate. As of 2025–26, this is approximately 6.8–7.0%. You can find the current rate on the RBI website or NSE.
Where do I find my portfolio's standard deviation?
For mutual funds, the standard deviation is published in fund factsheets (usually rolling 3-year annualised). For custom portfolios, calculate it from historical monthly returns using STDEV in Excel and multiply by √12 to annualise.
What's the difference between Sharpe and Sortino Ratio?
The Sharpe Ratio uses total standard deviation. The Sortino Ratio only uses downside deviation, arguing that upward volatility should not be penalised. Sortino is generally better for asymmetric return distributions.