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The Information Ratio Calculator helps you make informed decisions by calculating information ratio-related values. Calculate the Information Ratio to assess a portfolio's risk-adjusted returns relative to a benchmark.
Step-by-Step Instructions
Enter your investment amounts, expected returns, and time horizons in the input fields.
Review the calculated results displayed in real-time.
Compare different scenarios using the comparison view.
Apply the insights to your financial decisions.
When you want to evaluate a portfolio manager's ability to generate excess returns relative to the volatility of those returns.
- •Portfolio Managers
- •Investors
- •Financial Analysts
Scenario
A fund generates a 12% return while its benchmark returns 10%. The tracking error is 5%.
Outcome
The calculator determines an Information Ratio of 0.4, indicating moderate outperformance relative to the risk taken.
Still have questions? Check our financial glossary for definitions or explore our learning resources.
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