What this calculator does
Information ratio works out excess return over a benchmark per unit of tracking-error risk taken. Enter your own figures above and the answer updates as you type: nothing is fixed in the code, so the result reflects exactly the numbers you supply.
The formula this calculator evaluates is printed under the tool and explained below, so you can check the working by hand or reuse it in a spreadsheet.
The formula
FormulaInformation ratio = (portfolio return − benchmark return) / tracking error
The inputs explained
| Field | What to enter |
|---|---|
| Beginning portfolio value ($) | A number, measured in your currency. Starts at 2000000. |
| Ending portfolio value ($) | A number, measured in your currency. Starts at 2200000. |
| Benchmark return over same period (%) | A number, measured in %. Starts at 8. |
| Tracking error (std. dev. of excess return) (%) | A number, measured in %. Starts at 5. |
Worked examples
Every figure in the tables below is produced by this page’s own calculator at build time, so the numbers and the tool always agree. Select any row to load that scenario.
How the answer changes with beginning portfolio value
Every other input is held at the calculator’s starting values while beginning portfolio value varies. Select any row to load that scenario into the calculator.
How the answer changes with beginning portfolio value