# Treynor Ratio Calculator

URL: https://speedycalculator.com/calculators/finance/treynor-ratio/
Last updated: 2026-10-25

> The Treynor ratio calculator measures a portfolio's excess return over the risk-free rate per unit of market risk (beta), rewarding managers who earn more for the systematic risk they take.

## Inputs

- Beginning portfolio value
- Ending portfolio value
- Risk-free rate (%)
- Portfolio beta
- Market return (for comparison) (%)

## Results

- Portfolio return
- Treynor ratio
- Market Treynor ratio

## Formula

```
Portfolio return = (ending − beginning) ÷ beginning
Treynor ratio = (portfolio return − risk-free rate) ÷ beta
```

## Explanation

The Treynor ratio is useful for well-diversified portfolios, where beta captures most of the risk. Comparing it with the market's Treynor ratio (market return − risk-free rate) shows whether the portfolio beat the market on a risk-adjusted basis.

### How to use the Treynor Ratio Calculator

- **Beginning portfolio value**
- **Ending portfolio value**
- **Risk-free rate**
- **Portfolio beta**
- **Market return (for comparison)**

Results update as you type, and every field accepts the units shown in its menu.

### How it works

Enter the beginning and ending portfolio values, the risk-free rate and the portfolio's beta.

### Tips

- Use the nominal annual rate and pick the compounding frequency your bank or broker states.
- Small differences in return or fees compound into large differences over decades.
- Run the calculation with a cautious, a central and an optimistic return to see the range of outcomes.
- Past returns do not guarantee future returns – nothing here is investment advice.

### Common mistakes to avoid

- Comparing an APR with an APY or effective rate.
- Ignoring inflation, taxes and fees when judging a real return.
- Entering a percentage as a decimal (5 instead of 0.05 is correct here).

### Inputs explained

FieldWhat to enterBeginning portfolio valueAmount in your currencyEnding portfolio valueAmount in your currencyRisk-free rateIn %Portfolio betaA numberMarket return (for comparison)In %

### What each result means

- **Portfolio return** = ([Ending portfolio value]÷[Beginning portfolio value] - 1)×100
- **Treynor ratio** = ([Portfolio return] - [Risk-free rate])÷[Portfolio beta]
- **Market Treynor ratio** = [Market return (for comparison)] - [Risk-free rate]

### Example values

How the main result changes when **Beginning portfolio value** changes and everything else stays at the example values above:

Beginning portfolio valueTreynor ratio50,00010075,00037.778100,0006.667125,000-12150,000-24.444200,000-40

## Worked example

Inputs — Beginning portfolio value: $100,000; Ending portfolio value: $112,000; Risk-free rate: 4 %; Portfolio beta: 1.2; Market return (for comparison): 10 %.

Results — Portfolio return = 12 %; **Treynor ratio = 6.667**; Market Treynor ratio = 6.

## FAQ

**What is the Treynor ratio?**
Excess return per unit of beta.

**How is it different from the Sharpe ratio?**
Sharpe uses total volatility; Treynor uses only market risk.

**When is Treynor most useful?**
For diversified portfolios where specific risk has been diversified away.

**What formula does the Treynor Ratio Calculator use?**
Portfolio return = (ending − beginning) ÷ beginning.


## Sources

- [Corporate Finance Institute – financial ratios](https://corporatefinanceinstitute.com/)