For example, imagine a portfolio with an annual return of 9%, a risk-free rate of 3% and a beta of 1.2. The Treynor ratio would be calculated as follows: Treynor ratio = (9 – 3) / 1.2 = 0.5 ...

While the Sharpe ratio evaluates risk-adjusted returns and ... Plot the cumulative returns on a graph and fit a linear regression line through the data points. The slope of this line represents ...