Treynor Ratio : Meaning, Calculation and Examples

Financen31406 Jul, 2021Other

The Treynor ratio is basically used by the investors to measure the performance of their investments or to know how their investments are performing. As, of Treynor Ratio definition is stated as a measure by which the additional returns which is produced by a fund and is over and above the risk-free returns. Treynor Ratio is calculated by taking into account the difference between portfolio returns as well as the risk free rate and dividing them both. So, the formula for Treynor Ratio can be stated as follows: