Reviewed by JeFreda R. Brown The overall performance of your portfolio is the ultimate measure of how well your portfolio ...

The Sharpe ratio is one way to capture this risk-versus-reward detail and give investors extra insight into their assets' performance. Some investors use an index fund as a benchmark and attempt ...

To calculate the Sharpe ratio, you first need your portfolio's rate of return. Next, you need the rate of a risk-free investment, such as Treasury bonds. Subtract this risk-free rate from your ...

For example, a portfolio that produced annual returns of +15%, +80%, and +10%, would be perceived as fairly risky, so the Sharpe and Roy's safety-first ratio would be adjusted downward.