--- title: Sharpe Ratio description: The Sharpe Ratio is the return earned in excess of the risk free rate per unit of risk as defined as volatility, a measure of risk adjusted return. The higher the Sharpe Ratio, the better the returns --- [Skip to content](https://www.allocator.com/knowledge/sharpe-ratio#main-content) English Show submenu for translations ![Allocator_Logo_Colour_Mark.png\]](https://www.allocator.com/hs-fs/hubfs/Branding%20-%20Images%20and%20Logos/Allocator%20logos/Allocator_Logo_Colour_Mark.png?height=40&name=Allocator_Logo_Colour_Mark.png) - [Knowledge Base](https://www.allocator.com/knowledge) - [Allocator Platform](https://secure.allocator.com/) - [Sign out](https://www.allocator.com/_hcms/mem/logout) Open main navigation Close main navigation - [Knowledge Base](https://www.allocator.com/knowledge) - [Allocator Platform](https://secure.allocator.com/) - [Sign out](https://www.allocator.com/_hcms/mem/logout) - English Show submenu for translations Allocator Knowledge Base - There are no suggestions because the search field is empty. 1. [Allocator Knowledge Base](https://www.allocator.com/knowledge?hsLang=en) 2. [Hedge Funds](https://www.allocator.com/knowledge/hedge-funds?hsLang=en) 3. [Calculation Definitions](https://www.allocator.com/knowledge/hedge-funds?hsLang=en#calculation-definitions) # Sharpe Ratio ![](https://www.allocator.com/hubfs/image-png-Nov-25-2022-03-41-07-3586-PM.png) The Sharpe Ratio is the return earned in excess of the risk free rate per unit of risk as defined as volatility, a measure of risk adjusted return. The higher the Sharpe Ratio, the better the returns have been relative to the volatility of those returns.  On the statistics page you can also see the Sharpe Ratio for the last three years and five years.  The default risk free rate on Allocator is the 10-year Treasury Constant Maturity Rate, but this can be changed. - [Platform Knowledge Base](https://www.allocator.com/knowledge/platform-knowledge-base?hsLang=en#main-content) - [Stay on Top of Your Onboarding](https://www.allocator.com/knowledge/platform-knowledge-base?hsLang=en#stay-on-top-of-your-onboarding) - [Hedge Funds](https://www.allocator.com/knowledge/hedge-funds?hsLang=en#main-content) - [Calculation Definitions](https://www.allocator.com/knowledge/hedge-funds?hsLang=en#calculation-definitions) - [How-To Guides](https://www.allocator.com/knowledge/hedge-funds?hsLang=en#how-to-guides) - [Private Capital Funds](https://www.allocator.com/knowledge/private-capital-funds?hsLang=en#main-content) - [Calculation Definitions](https://www.allocator.com/knowledge/private-capital-funds?hsLang=en#calculation-definitions) - [How-To Guides](https://www.allocator.com/knowledge/private-capital-funds?hsLang=en#how-to-guides) - [Export Your Data](https://www.allocator.com/knowledge/export-your-data?hsLang=en#main-content) - [Allocator Excel Add-In](https://www.allocator.com/knowledge/export-your-data?hsLang=en#allocator-excel-add-in) - [Allocator API](https://www.allocator.com/knowledge/export-your-data?hsLang=en#allocator-api) - [What's New on Allocator?](https://www.allocator.com/knowledge/whats-new-on-allocator?hsLang=en#main-content) - [Q1 2026](https://www.allocator.com/knowledge/whats-new-on-allocator?hsLang=en#q1-2026) [![Chill listening crop-3](https://www.allocator.com/hs-fs/hubfs/Branding%20-%20Images%20and%20Logos/Allocator%20logos/Allocator_Logo_Colour%20No%20Background.png?width=171&height=24&name=Allocator_Logo_Colour%20No%20Background.png "Chill listening crop-3")](https://knowledge.allocator.com/knowledge?hsLang=en) www.allocator.com Copyright © 2026, Allocator