Sortino Ratio Calculator

Free Sortino Ratio Calculator

Measure Downside Risk Adjusted Investment Returns

The Sortino Ratio Calculator helps investors evaluate the risk adjusted performance of an investment by focusing only on downside volatility. Unlike the Sharpe ratio, the Sortino ratio considers only negative deviations from the expected return, providing a clearer picture of potential losses. By entering the investment’s expected return, the risk-free rate, and the downside deviation, this tool calculates the Sortino ratio. A higher ratio indicates a better return for the downside risk taken. Using this calculator, both novice and experienced investors can make informed decisions, select investments with favorable risk-reward profiles, and improve portfolio management strategies.

Measure the downside risk adjusted return of an investment.

Portfolio Return (%)

Risk-Free Rate (%)

Downside Deviation (%)

Calculation Results

Sortino Ratio

0.00 Calculation Breakdown

Formula Used: (Portfolio Return - Risk-Free Rate) / Downside Deviation

Sortino Ratio Calculator Guide

The Formula We Use

Sortino Ratio = (Portfolio Return minus Risk Free Return) divided by Downside Deviation
Excess Return = Average Portfolio Return minus Average Risk Free Return
Downside Deviation: square root of the average of squared returns that fall below the target return
Target Return is usually the risk free return or zero

Example Calculation

Portfolio Return 12 percent annual

Risk Free Rate 4 percent annual

Downside Deviation 8 percent annual

Excess Return = 12 percent minus 4 percent = 8 percent
Sortino Ratio = 8 percent divided by 8 percent = 1.00
About 1 point 0 means acceptable risk adjusted return, 2 point 0 or higher is considered strong

How to Use This Calculator

Enter periodic portfolio returns and the matching risk free rate for the same period.
Choose the target return. Many users pick the risk free rate or zero.
The tool computes downside deviation using only returns below the target.
It divides excess return by downside deviation to produce the Sortino Ratio.

Tips for Better Interpretation

Match frequencies: use the same period for returns, risk free rate, and deviation.
Pick a clear target: risk free rate is common for most portfolios.
Focus on losses: Sortino looks at harmful volatility only, unlike Sharpe.
Use enough data: longer samples give more stable results.
Compare like strategies: evaluate funds with similar styles and goals.

This is educational content, not financial advice.

Benefits of Using Our
Sortino Ratio Calculator

Focus on Downside Risk

Measures returns in relation to negative volatility rather than total volatility.

Better Risk Assessment

Helps investors understand potential losses compared to Sharpe Ratio.

Portfolio Optimization

Identify investments that maximize returns while minimizing downside risk.

Beginner Friendly Insights

Easy to read output makes understanding risk-adjusted returns simple.

Mobile Responsive

Works perfectly on mobile, tablet, and desktop devices.

Secure Calculations

All data is processed locally in your browser; no storage or sharing.

Frequently Asked Questions

What is a Sortino Ratio Calculator?

The Sortino Ratio measures risk-adjusted returns focusing only on downside volatility, giving a clearer picture of potential losses.

Why use Sortino Ratio instead of Sharpe Ratio?

Sortino Ratio penalizes only negative returns, making it more suitable for evaluating investments with asymmetric risk.

Can it compare multiple investments?

Yes, you can compare portfolios or assets to determine which has the best downside-adjusted performance.

Is it suitable for beginners?

Absolutely. The calculator is user-friendly and explains results clearly.

What inputs are needed?

You need the expected return of the investment and the standard deviation of negative returns (downside deviation).

Is my data secure?

Yes. All inputs remain on your device, and no data is transmitted or stored.