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Treynor Ratio & Portfolio Beta Calculator

Estimate excess return per unit of positive portfolio beta.

  • Formula & worked example
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Calculator inputs

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How to use this calculator

  1. Enter the known values in the units shown. Results update as you type.
  2. Edit a calculated value to solve backwards, or lock a value to hold it fixed.
  3. Use the worked example to check the method. Reset restores the starting fields.

Use the result with context

Results are estimates for planning and education. Confirm rates, taxes, fees, and legal requirements with the relevant institution or a qualified professional before making a financial decision.

Formula and method

A portfolio rising from 100,000 to 110,000 has a 10% simple return. Subtracting a 2% risk-free return and dividing by beta 0.8 gives 10% per unit of beta.

Treynor ratio = (portfolio return − risk-free return) ÷ beta

Worked example

Enter these known values and leave the other values blank.

Beginning portfolio value
100000 USD
Ending portfolio value
110000 USD
Risk-free rate
2 %
Portfolio's beta (> 0)
0.8
Portfolio return
10 %
Treynor ratio
10 %

Assumptions and limitations

  • Beta measures sensitivity to the chosen market benchmark. This captured model requires positive beta. Returns and the risk-free reference must use matching periods, and start/end portfolio values assume no external cash flows.
  • Use consistent periods, rates and accounting definitions. These calculations describe the entered assumptions.

Common questions

How does beta differ from total volatility?

Beta measures sensitivity to the chosen market benchmark. This captured model requires positive beta. Returns and the risk-free reference must use matching periods, and start/end portfolio values assume no external cash flows.

References

The calculation equations, inverse formulas, units, and input rules were imported from this source. Bookify provides the interface and equation solver.

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