ℹ️ Information Ratio Calculator
Risk-adjusted active return
How to Use This Calculator
1
Enter Excess Return
Portfolio return minus benchmark (annualized).
2
Enter Tracking Error
Std deviation of excess returns (annualized).
Formula
IR = (R_p − R_b) / σ(R_p − R_b)
Example: Excess=2.5%, TE=1.5% → IR=1.67
Frequently Asked Questions
What is a good IR?
Above 0.5 is decent, above 1.0 is strong, but depends on context.
How does it differ from Sharpe?
Sharpe uses risk-free rate and total volatility; IR uses benchmark and tracking error.