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Treynor Ratio Calculator

Calculate your portfolio’s return and Treynor Ratio using beginning and ending values, risk-free rate, and portfolio beta.

Treynor Ratio Calculator

In the world of finance and investing, measuring performance goes beyond just looking at absolute returns. Investors also need to understand how much risk was taken to achieve those returns. The Treynor Ratio, also known as the reward-to-volatility ratio, is one of the most important tools for this purpose. It evaluates a portfolio’s return in relation to its systematic risk, helping investors decide whether the returns justify the risks taken.

Our Treynor Ratio Calculator makes this process simple and efficient. By entering your beginning and ending portfolio values, risk-free rate, and portfolio beta, the calculator instantly computes both your portfolio’s return and its Treynor Ratio. This tool is designed for investors, portfolio managers, analysts, and finance students who want to measure performance with precision.

What is the Treynor Ratio?

The Treynor Ratio is a risk-adjusted performance metric developed by Jack Treynor. It compares the excess return of a portfolio (returns above the risk-free rate) against its market risk (measured by beta).

Treynor Ratio = (Portfolio Return – Risk-Free Rate) ÷ Portfolio Beta

Portfolio Return: The percentage gain or loss of the portfolio over a given period.
Risk-Free Rate: The return from a risk-free investment (like government bonds).
Beta: A measure of the portfolio’s sensitivity to overall market movements.
A higher Treynor Ratio means the portfolio is generating more return per unit of market risk, making it more attractive for investors.

Why Use the Treynor Ratio Calculator?

Instant and Accurate – No manual formulas required.
Portfolio Efficiency – Understand if risk is justified by returns.
Compare Investments – Quickly assess multiple portfolios.
Educational Resource – Great for finance students learning performance measurement.
Decision-Making Tool – Helps managers and advisors optimize portfolios.

How to Use the Calculator

• Enter Beginning Portfolio Value – The initial value of your investment.
• Enter Ending Portfolio Value – The value after the investment period.
• Enter Risk-Free Rate (%) – Use the return rate of a government bond or treasury bill.
• Enter Portfolio Beta – A measure of how volatile the portfolio is compared to the market.
• Click Calculate – Instantly get Portfolio Return (%) and Treynor Ratio (%).

Example Calculations

Example 1 – High Return Portfolio

Portfolio Return ≈ 3,328.57%
Treynor Ratio ≈ 2,769.64%

✅ Result: Portfolio’s Return (%) = 3,328.57% , Treynor Ratio (%) = 2769.64%

Example 2 – Moderate Portfolio

Portfolio Return = 40%
Treynor Ratio = 32.7272%

✅ Result: Portfolio’s Return (%) = 40% , Treynor Ratio (%) = 32.7272%

Example 3 – Poor Performance

Portfolio Return = 6.25%
Treynor Ratio = 0.9615%

✅ Result: Portfolio’s Return (%) = 6.25% , Treynor Ratio (%) = 0.9615%

Who Should Use the Treynor Ratio Calculator?

Investors – Evaluate if returns justify risk.
Fund Managers – For portfolio benchmarking.
Financial Analysts – To assess investment strategies.
Students & Educators – Learn risk-adjusted performance.

✅ The Treynor Ratio Calculator is a powerful tool for assessing portfolio performance in terms of risk-adjusted returns. Instead of focusing only on raw returns, it helps investors and professionals understand whether a portfolio’s rewards are worth the risks taken.

👉 Use our Treynor Ratio Calculator today on Hive Calculator to analyze, compare, and optimize your investments with accuracy and ease.