The value of the average rate of return for a portfolio during a specific time period minus the average rate of return on risk-free assets during the same time, then divided by the standard deviation of the rate of return for the portfolio during the time period. This performance ratio uses the standard deviation of returns as the measure of risk. The Sharpe measure evaluates the portfolio manager on the basis of rate of return and diversification.

# Sharpe Portfolio Performance Ratio - Investment & Finance Definition

Webster's New World Finance and Investment Dictionary Copyright © 2010 by Wiley Publishing, Inc., Indianapolis, Indiana.

Used by arrangement with John Wiley & Sons, Inc.

Used by arrangement with John Wiley & Sons, Inc.

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Sharpe Portfolio Performance Ratio. (n.d.). Retrieved October 11th, 2018, from http://www.yourdictionary.com/sharpe-portfolio-performance-ratio