Treynor Ratio Calculator

Use Treynor when comparing well-diversified portfolios where unsystematic risk is irrelevant, such as evaluating mutual fund managers.

Higher is better. Compare it to the market's Treynor ratio (Rm − Rf)/1 = market excess return. Portfolios above this outperformed on a risk-adjusted basis.

Beta measures only systematic risk. For a diversified investor, only systematic risk is priced; unsystematic risk is diversified away.