Treynor Ratio Calculator India (2026) – Measure Portfolio Efficiency

Assess your portfolio's performance relative to its market risk. Our Treynor Ratio calculator helps you determine if your returns justify the systematic risk (Beta) taken.

About | Formula | Example | FAQs

Portfolio Data

%

Excess Return

9.00%

Risk Assessment

Aggressive

Treynor Performance Summary

Calculated Treynor Ratio

7.50

Efficiency Status

Superior

Excess Return (%) Market Risk (Beta)
Excess: 9.00%
Beta: 1.20

Key Insights

  • ✅ Adjusts for Systematic Risk
  • 📊 Best for Diversified Portfolios
  • ⚖️ Treynor vs Sharpe Comparison
  • 📈 Higher Ratio = Better Skill

Risk Sensitivity Table

How your Treynor Ratio changes across different levels of Portfolio Beta.

Beta (β) Excess Return Treynor Score Rating

How is the Treynor Ratio Calculated?

T = (Rp - Rf) / βp

T: Treynor Ratio | Rp: Portfolio Return

Rf: Risk-Free Rate | βp: Portfolio Beta

Example Treynor Calculation

If a mutual fund earns 18%, the risk-free rate is 6%, and the portfolio beta is 1.5:
  • Excess Return: 12%
  • Treynor Ratio: 12 / 1.5 = 8.0
  • Status: Superior Skill-based Return

What is the Treynor Ratio?

The Treynor ratio, also known as the reward-to-volatility ratio, is a performance metric for determining how much excess return was generated for each unit of risk taken by a portfolio. It is named after Jack Treynor, who developed the indicator. Unlike the Sharpe ratio, which uses total volatility (standard deviation), the Treynor ratio uses systematic risk (Beta) as the measure of risk.

This makes the Treynor Ratio particularly valuable for investors who hold well-diversified portfolios. Since a diversified portfolio eliminates unsystematic risk (specific risk related to individual companies), the only risk remaining is systematic risk (market risk). The Treynor ratio evaluates how well a manager has been compensated for taking that market risk.

Sharpe vs Treynor vs Sortino

Ratio Risk Factor Used Best For
Sharpe Ratio Total Volatility Single Asset Analysis
Treynor Ratio Market Risk (Beta) Diversified Portfolios
Sortino Ratio Downside Deviation Risk-Averse Investors

How to Interpret Your Treynor Score?

While there is no "fixed" good number, the Treynor ratio is best used to compare two similar investment options:

High Treynor Ratio

Meaning: The fund manager is providing a high return for the market risk taken. This indicates superior fund management and efficiency.

Highly Efficient

Low Treynor Ratio

Meaning: The return generated is not high enough compared to the systematic risk. You might be better off with a simpler index fund.

Underperforming Risk

Treynor Ratio Frequently Asked Questions (2026)

1. What is the difference between Treynor and Sharpe ratios?
The Sharpe ratio uses standard deviation (total risk) as the denominator, whereas the Treynor ratio uses Beta (market risk). Treynor is better for investors who are already diversified.
2. Can a Treynor ratio be negative?
Yes. If the portfolio return is less than the risk-free rate, the ratio will be negative. This indicates poor performance. It can also be negative if the Beta is negative, though that is rare.
3. Does Treynor ratio include inflation?
The Treynor ratio uses nominal returns. However, the risk-free rate (usually based on government bonds) often correlates with inflation expectations.
4. What is a "Risk-Free Rate" in India?
In India, the yield on 10-year Government of India Bonds (G-Secs) or the 91-day Treasury Bill rate is typically used as the risk-free rate.

Related Analysis Tools

Sharpe Ratio

Check total risk-adjusted returns.

Sortino Ratio

Measure downside risk return.

Beta Calculator

Check stock market sensitivity.

CAGR Calculator

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Disclaimer

The Treynor Ratio Calculator is for informational purposes only. It uses historical performance and systematic risk values to provide insights. Past performance does not guarantee future results. Consult with a professional financial advisor before making any investment decisions.