basic

Information Ratio Calculator

IR = (R_p − R_b) / σ(R_p − R_b).

Compute the information ratio — a measure of an active portfolio's excess return per unit of tracking risk taken vs its benchmark: IR = (R_p − R_b) / TE, where TE is the standard deviation of active returns. IR > 0.5 = good; > 1.0 = great; > 2.0 = legendary.

Nadia Almasri By Nadia Almasri
Published Last reviewed 1 min read

Inputs

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Results

Enter values and click Calculate to see results.
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How to use this calculator

  1. Fill in the inputs above using the units you already have.
  2. Values update automatically as you type — no submit button needed.
  3. Hover any result row for the underlying formula and intermediate values.

Formula

IR = (R_p − R_b) / TE.

In depth

Compute the information ratio — a measure of an active portfolio's excess return per unit of tracking risk taken vs its benchmark: IR = (R_p − R_b) / TE, where TE is the standard deviation of active returns. IR > 0.5 = good; > 1.0 = great; > 2.0 = legendary.