How to use this calculator
- Enter equal-period portfolio returns (%), matching per-period risk-free return (%), periods per year.
- Choose a display currency, then select Calculate. Results also update after a brief pause while you edit.
- Read the result with the assumptions below. Export details or save a second scenario to compare your choices.
Formula and method
Assumptions and limitations
Use your own matching-period observations. These descriptive calculations are not forecasts, investment advice or a national dataset. Lists accept up to 100 comma-separated numbers; do not enter thousands separators. Annualization assumes independent, identically distributed returns. Zero volatility is undefined.
Worked example
For the sample inputs shown above, historical sharpe ratio produces a first result of approximately 2. The assumptions below explain what this result represents.
What the result means
Compare historical excess return with observed volatility under a constant risk-free-rate assumption.
Common questions
How is the calculation performed?
Sharpe = mean(return−risk-free) / sample standard deviation(return−risk-free); annualized estimate multiplies by sqrt(periods/year).
What does the model leave out?
Use your own matching-period observations. These descriptive calculations are not forecasts, investment advice or a national dataset. Lists accept up to 100 comma-separated numbers; do not enter thousands separators. Annualization assumes independent, identically distributed returns. Zero volatility is undefined.
Methodology and transparency
Calculation specification reviewed on 2026-10-14. Mathematical implementation is tested against independent reference fixtures. This does not imply review by a licensed financial professional. Read the testing and precision policy.
Background reference: web.stanford.edu — financial method. FinanceMath implements its own calculator.