Finance

Instant, private, and free

Treynor Ratio Calculator.

Calculate excess portfolio return per unit of beta.

On-device calculationNo signup

Set your values

Results update as you type.

02 / ANSWER

Portfolio return

Risk-free rate

Portfolio beta

Treynor ratio

0.0000%%

FAQs

How does the treynor ratio calculator work?

Enter the requested values to receive a deterministic result. No live market, tax, or jurisdiction data is inferred.

Use Cases

Evaluate Portfolio Performance

Compare the risk-adjusted returns of different portfolios or funds, especially those with varying levels of market risk, to identify which provides better compensation for systematic risk.

Example: Compare two mutual funds: Fund A has a Treynor Ratio of 0.08, Fund B has 0.05; Fund A is more efficient.

Assess Individual Stock Risk-Return

Use the Treynor Ratio to evaluate a single stock's performance relative to its market risk, helping you decide if the expected return justifies the systematic risk.

Example: A stock with a beta of 2 and a return of 15% when risk-free is 3% has a Treynor Ratio of 6%.

Frequently Asked Questions

What is the Treynor Ratio?: The Treynor Ratio measures a portfolio's excess return (above the risk-free rate) per unit of systematic risk, as measured by beta. It helps investors evaluate how well a portfolio compensates for market risk.
How is the Treynor Ratio calculated?: The formula is (Portfolio Return - Risk-Free Rate) / Beta. For example, if a portfolio returns 12%, the risk-free rate is 2%, and beta is 1.5, the Treynor Ratio is (0.12 - 0.02) / 1.5 = 0.0667, or 6.67%.
What does a higher Treynor Ratio indicate?: A higher Treynor Ratio indicates better risk-adjusted performance relative to systematic risk. It means the portfolio is generating more excess return per unit of market risk, which is generally preferred by investors.

Tips & Common Mistakes

Tips

Ensure you use the same time period for portfolio return, risk-free rate, and beta to get an accurate ratio.
Use a consistent risk-free rate, such as the yield on a 10-year government bond, for meaningful comparisons.
Remember that beta measures systematic risk, not total risk; the Treynor Ratio ignores unsystematic risk.
Compare Treynor Ratios only among portfolios with similar investment objectives and benchmarks.

Common Mistakes to Avoid

Using the portfolio's total risk (standard deviation) instead of beta, which would be the Sharpe Ratio, not Treynor.
Forgetting to subtract the risk-free rate from the portfolio return before dividing by beta.
Using a beta that is not aligned with the portfolio's actual market exposure, leading to misleading results.

Last updated: August 13, 2026

Use Cases

Evaluate Portfolio Performance

Compare the risk-adjusted returns of different portfolios or funds, especially those with varying levels of market risk, to identify which provides better compensation for systematic risk.

Example: Compare two mutual funds: Fund A has a Treynor Ratio of 0.08, Fund B has 0.05; Fund A is more efficient.

Assess Individual Stock Risk-Return

Use the Treynor Ratio to evaluate a single stock's performance relative to its market risk, helping you decide if the expected return justifies the systematic risk.

Example: A stock with a beta of 2 and a return of 15% when risk-free is 3% has a Treynor Ratio of 6%.

Frequently Asked Questions

What is the Treynor Ratio?

The Treynor Ratio measures a portfolio's excess return (above the risk-free rate) per unit of systematic risk, as measured by beta. It helps investors evaluate how well a portfolio compensates for market risk.

How is the Treynor Ratio calculated?

The formula is (Portfolio Return - Risk-Free Rate) / Beta. For example, if a portfolio returns 12%, the risk-free rate is 2%, and beta is 1.5, the Treynor Ratio is (0.12 - 0.02) / 1.5 = 0.0667, or 6.67%.

What does a higher Treynor Ratio indicate?

A higher Treynor Ratio indicates better risk-adjusted performance relative to systematic risk. It means the portfolio is generating more excess return per unit of market risk, which is generally preferred by investors.

Tips & Common Mistakes

Tips

Ensure you use the same time period for portfolio return, risk-free rate, and beta to get an accurate ratio.
Use a consistent risk-free rate, such as the yield on a 10-year government bond, for meaningful comparisons.
Remember that beta measures systematic risk, not total risk; the Treynor Ratio ignores unsystematic risk.
Compare Treynor Ratios only among portfolios with similar investment objectives and benchmarks.

Common Mistakes to Avoid

Using the portfolio's total risk (standard deviation) instead of beta, which would be the Sharpe Ratio, not Treynor.
Forgetting to subtract the risk-free rate from the portfolio return before dividing by beta.
Using a beta that is not aligned with the portfolio's actual market exposure, leading to misleading results.

Finance

Instant, private, and free

Treynor Ratio Calculator.

Calculate excess portfolio return per unit of beta.

On-device calculationNo signup

Set your values

Results update as you type.

02 / ANSWER

Portfolio return

Risk-free rate

Portfolio beta

Treynor ratio

0.0000%%

FAQs

How does the treynor ratio calculator work?

Enter the requested values to receive a deterministic result. No live market, tax, or jurisdiction data is inferred.

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Use Cases

Evaluate Portfolio Performance

Compare the risk-adjusted returns of different portfolios or funds, especially those with varying levels of market risk, to identify which provides better compensation for systematic risk.

Example: Compare two mutual funds: Fund A has a Treynor Ratio of 0.08, Fund B has 0.05; Fund A is more efficient.

Assess Individual Stock Risk-Return

Use the Treynor Ratio to evaluate a single stock's performance relative to its market risk, helping you decide if the expected return justifies the systematic risk.

Example: A stock with a beta of 2 and a return of 15% when risk-free is 3% has a Treynor Ratio of 6%.

Frequently Asked Questions

What is the Treynor Ratio?: The Treynor Ratio measures a portfolio's excess return (above the risk-free rate) per unit of systematic risk, as measured by beta. It helps investors evaluate how well a portfolio compensates for market risk.
How is the Treynor Ratio calculated?: The formula is (Portfolio Return - Risk-Free Rate) / Beta. For example, if a portfolio returns 12%, the risk-free rate is 2%, and beta is 1.5, the Treynor Ratio is (0.12 - 0.02) / 1.5 = 0.0667, or 6.67%.
What does a higher Treynor Ratio indicate?: A higher Treynor Ratio indicates better risk-adjusted performance relative to systematic risk. It means the portfolio is generating more excess return per unit of market risk, which is generally preferred by investors.

Tips & Common Mistakes

Tips

Ensure you use the same time period for portfolio return, risk-free rate, and beta to get an accurate ratio.
Use a consistent risk-free rate, such as the yield on a 10-year government bond, for meaningful comparisons.
Remember that beta measures systematic risk, not total risk; the Treynor Ratio ignores unsystematic risk.
Compare Treynor Ratios only among portfolios with similar investment objectives and benchmarks.

Common Mistakes to Avoid

Using the portfolio's total risk (standard deviation) instead of beta, which would be the Sharpe Ratio, not Treynor.
Forgetting to subtract the risk-free rate from the portfolio return before dividing by beta.
Using a beta that is not aligned with the portfolio's actual market exposure, leading to misleading results.

Last updated: August 13, 2026