Free Sharpe Ratio Calculator
The Sharpe ratio measures risk-adjusted return: how much excess return you earn per unit of volatility. Enter your strategy's average return, standard deviation, and the risk-free rate — the calculator returns the Sharpe and tells you what range it falls into.
S&P 500 ≈ 15-18%, individual stocks 25-40%
10-year Treasury yield is the typical proxy
Sharpe ratio
0.50
Sub-optimal — most retail strategies live here
Want the live scanner that uses these calculations?
SultraxAI scans ~100 stocks and 12 crypto in real time, publishes win rates on every signal, and helps size positions automatically. Try it free →
How to use this calculator
Formula:
Sharpe = (Average Return − Risk-Free Rate) ÷ Standard Deviation
Conventions:
- Below 0 — strategy is underperforming risk-free assets. Not good.
- 0 to 1 — sub-optimal but functional. Most retail strategies live here.
- 1 to 2 — good. Reliable systematic strategies aim here.
- 2 to 3 — excellent. Hard to maintain over time.
- Above 3 — rare, often unsustainable. Check for survivorship bias.
Use annualized values for both return and std dev. Daily Sharpe ≈ Annual Sharpe ÷ √252.