Information Ratio Calculator
FinanceCalculate the information ratio to measure the excess return a portfolio manager generates relative to a benchmark, adjusted for consistency of that outperformance.
Information Ratio
Excess return over the benchmark divided by tracking error
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Odeh Ahwal0people find this calculator helpful
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Frequently Asked Questions
What is considered a good information ratio?
An information ratio above 0.5 is generally considered good, and above 1.0 is considered excellent, indicating consistent outperformance relative to the benchmark.
How is information ratio different from Sharpe ratio?
Sharpe ratio measures returns relative to a risk-free rate using total volatility, while information ratio measures returns relative to a benchmark using tracking error, the volatility of the excess return specifically.
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