What this calculator does
Treynor ratio works out return earned above the risk-free rate, per unit of market (beta) 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
FormulaTreynor ratio = (Portfolio return − Risk-free rate) / Beta
The inputs explained
| Field | What to enter |
|---|---|
| Portfolio (or asset) return (%) | A number, measured in %. Starts at 12. |
| Risk-free rate (%) | A number, measured in %. Starts at 4. |
| Portfolio beta | A number. Starts at 1.2. |
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 portfolio (or asset) return
Every other input is held at the calculator’s starting values while portfolio (or asset) return varies. Select any row to load that scenario into the calculator.
How the answer changes with portfolio (or asset) return
| Portfolio (or asset) return (%) | Treynor ratio | Excess return | Reading |
|---|---|---|---|
| 6 | 1.67 | 2.00% | Modest reward for the market risk taken |
| 9 | 4.17 | 5.00% | Solid beta-adjusted return |
| 12 | 6.67 | 8.00% | Solid beta-adjusted return |
| 18 | 11.67 | 14.0% | Very strong beta-adjusted return |
| 24 | 16.67 | 20.0% | Very strong beta-adjusted return |
| 36 | 26.67 | 32.0% | Very strong beta-adjusted return |