Your inputs

Quick examples

Portfolio return (Rp)

Risk-free rate (Rf)

Beta (β)

Market return (optional) optional

Results

Treynor ratio0.0833= 8.33% excess return per unit of beta

Excess return+10%

Return per unit of β8.33%

Treynor uses beta (market risk) instead of total volatility, so it suits well-diversified portfolios where stock-specific risk has been diversified away.

Not financial advice. Results are estimates based on the values you enter and simplified assumptions; real trades are affected by fees, slippage, gaps and other factors. Trading involves substantial risk of loss. Read the full disclaimer.

How to calculate the Treynor ratio

Treynor = (R_p − R_f) ÷ β_p

Worked example

Portfolio A: 12% return, β 1.2. Portfolio B: 15% return, β 1.5. Risk-free rate 2%.
Treynor A = (0.12 − 0.02) ÷ 1.2 = 0.0833.
Treynor B = (0.15 − 0.02) ÷ 1.5 = 0.0867 — B earned slightly more per unit of market risk.

How to interpret the Treynor ratio

Compare a portfolio's Treynor ratio with the market's own (R_m − R_f, since the market's beta is 1). Above the market means better reward for systematic risk. Treynor ignores stock-specific risk, so it only makes sense for well-diversified portfolios — for concentrated ones use the Sharpe ratio. Estimate beta with the beta calculator.

Limitations and common mistakes

Near-zero or negative betas make the ratio unstable or meaningless.
Use beta estimated over the same period as the returns.

Risk-Adjusted Ratios

Sharpe Ratio Calculator

Measure excess return per unit of volatility from annual figures or a series of returns.

12% return · 2% Rf · 8% σ → 1.25

Risk Metrics

Beta Calculator

Measure how sensitive an asset or portfolio is to market moves from two return series.

Asset vs index returns → β, correlation, R²

Risk Metrics

Jensen's Alpha Calculator

Compare actual return with the CAPM-expected return for the beta taken to isolate skill.

15% return · β 1.2 · market 10% · Rf 2% → α 3.4%

Treynor Ratio calculator FAQ

Is the Treynor ratio expressed as a percentage?

It's usually quoted as a decimal (0.0833) or as percentage points per unit of beta (8.33%).

Treynor vs Sharpe?

Sharpe uses total volatility, Treynor uses beta. For a diversified portfolio they tell a similar story; for a concentrated one Sharpe is more honest.