Sharpe Ratio Calculator
Measure risk-adjusted investment performance
Calculate Sharpe Ratio
Your annualized return
Treasury/stablecoin yield
Annual volatility
Your Sharpe Ratio
<0Below Avg
0-1Good
1-2Very Good
2-3Excellent
>3
Calculate from Returns Data
Enter monthly/weekly returns to auto-calculate average return and volatility
| Period | Return (%) |
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Sharpe Ratio FAQ
My Sharpe is 0.5 - is that bad?
For crypto, not terrible. BTC itself often has 0.3-0.8. In TradFi, <1 is below average. Context matters - compare to relevant benchmarks.
High return but low Sharpe?
Means you took massive risk. 100% return with 150% volatility = Sharpe ~0.63. A 30% return with 20% vol = Sharpe ~1.25. Less return, better ratio.
Does timeframe matter?
Yes. Annualize for comparison. Monthly Sharpe × √12 ≈ Annual. Daily × √252 ≈ Annual. Longer periods smooth out noise.
Negative Sharpe meaning?
Your return was below risk-free rate. You literally would've made more in treasuries with zero risk. Time to reassess strategy.
Sharpe vs Sortino?
Sharpe uses total volatility. Sortino only uses downside volatility. If your volatility is mostly upside, Sortino will look better.
Can I improve my Sharpe?
Add uncorrelated assets (reduces volatility). Avoid chasing pumps (reduces drawdowns). Size positions properly. Or simply accept lower returns for lower risk.
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