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Sharpe Ratio Calculator India 2026 – Risk-Adjusted Returns

Use this free Sharpe Ratio Calculator in India to measure whether a fund or portfolio compensates you adequately for the risk taken — the key metric for fund selection.

Calculate the Sharpe Ratio to measure risk-adjusted returns on any investment or portfolio.

Portfolio Return (%)

Risk-Free Rate (%) — e.g. T-bill

Standard Deviation / Volatility (%)

Benchmark Return (%)

Benchmark Volatility (%)

Portfolio Value ($)

Currency

Sharpe Ratio

Excess Return

Benchmark Sharpe

Alpha vs Benchmark

Risk Premium

Rating

Annual Gain

What is the Sharpe Ratio?

The Sharpe Ratio measures risk-adjusted return — how much excess return you get per unit of risk taken. Developed by Nobel laureate William Sharpe, it is the most widely used risk-adjusted performance metric.

Formula

Sharpe Ratio = (Portfolio Return - Risk-Free Rate) / Standard Deviation Excess Return = Portfolio Return - Risk-Free Rate

Examples

US — Portfolio returns 15%, T-bill 5%, volatility 20%

Sharpe = (15-5)/20 = 0.50 | Benchmark Sharpe (12%, 18%): 0.39 | Portfolio wins on risk-adjusted basis

India — Mutual fund 18%, Repo rate 6.5%, volatility 22%

Sharpe = (18-6.5)/22 = 0.52 | Above 0.5 = solid risk-adjusted performance

Example — Euro Zone

€50,000 fund: 11% return, 3.5% ECB risk-free rate, 14% volatility. Sharpe ratio: 0.536 | Excess return: €3,750 | Grade: Acceptable

Why Use This?

The Sharpe Ratio lets you compare investments with different risk profiles. A 20% return with 30% volatility (Sharpe 0.5) may be worse than a 12% return with 10% volatility (Sharpe 0.7).

What is a good Sharpe Ratio?▼

Below 1.0: acceptable | 1.0-2.0: good | 2.0-3.0: very good | 3.0+: excellent. The S&P 500 historically averages 0.4-0.6.

Sharpe vs Sortino Ratio?▼

Sortino only penalises downside volatility, making it better for asymmetric return distributions. Sharpe penalises all volatility equally.

Why does the risk-free rate matter?▼

It is your baseline — what you earn with zero risk. A higher risk-free rate raises the bar for investments to justify their risk premium.

Tip: Warren Buffett's Berkshire Hathaway has maintained a Sharpe Ratio of ~0.79 since 1965 — exceptional over that timeframe.