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Information Ratio Calculator — result sheet
Compare a portfolio's active return with its tracking error to estimate return per unit of active risk.
Inputs used
Results
Visual chart
Breakdown
Calculation steps
Returned data table
Formula and methodology
Formula: Information ratio = (portfolio return − benchmark return) ÷ tracking error.
The information ratio puts active return and active risk on the same scale. It is useful only when the return period, benchmark, and tracking-error convention are consistent; a single ratio cannot establish skill or predict future results.
This result follows the calculator's declared inputs, precision, validation boundaries, and model limits.
Input contract
- Portfolio return — %; minimum -1000; maximum 1000
- Benchmark return — %; minimum -1000; maximum 1000
- Tracking error — percentage points; minimum 1.0E-6; maximum 1000
Worked example
| Input | Value |
|---|---|
| Portfolio return | 12 |
| Benchmark return | 8 |
| Tracking error | 5 |
Active return is 4 percentage points and the information ratio is 0.8.
Assumptions and limits
- Portfolio and benchmark returns cover the same period and are measured with compatible return conventions.
- Tracking error is a positive standard deviation of active returns, expressed in percentage points for the same period.
- The calculation is educational and does not account for fees, taxes, leverage, liquidity, or investment suitability.
Calculator note
Source and methodology
Use the official WorldCalculate methodology policy for the source, formula, precision, and boundary standards behind this calculator.
Planning estimate, not financial, medical, legal, or professional advice. © WorldCalculate — reuse with attribution. Built and curated by Hassan ALRowaie.
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