Sharpe ratio

noun

A ratio that measures the excess return (or risk premium) per unit of deviation in an investment asset or a trading strategy, used to examine the performance of an investment by adjusting for its risk.

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Meanings

nounSharpe ratio (plural Sharpe ratios)

plural Sharpe ratios

  1. businessA ratio that measures the excess return (or risk premium) per unit of deviation in an investment asset or a trading strategy, used to examine the performance of an investment by adjusting for its risk.

Origin

Named after William F. Sharpe (born 1934), American economist.

Full word history & related roots →

Translations

Finnish Sharpen luku
  • Sharpen lukumeasure of risk-adjusted performance of an asset
German Sharpe-Quotient, Sharpe-Maß
  • Sharpe-Quotientmeasure of risk-adjusted performance of an asset
  • Sharpe-Maßmeasure of risk-adjusted performance of an asset
  • Sharpe-Verhältnismeasure of risk-adjusted performance of an asset
Swedish Sharpekvot
  • Sharpekvotmeasure of risk-adjusted performance of an asset
Cite this entry
APA

Sharpe ratio. (n.d.). In WatkinsX Dictionary. Retrieved November 4, 2026, from https://dictionary.watkinsx.com/word/Sharpe%20ratio

MLA

“Sharpe ratio.” WatkinsX Dictionary, https://dictionary.watkinsx.com/word/Sharpe%20ratio. Accessed November 4, 2026.

Chicago

WatkinsX Dictionary, s.v. “Sharpe ratio,” accessed November 4, 2026, https://dictionary.watkinsx.com/word/Sharpe%20ratio.

Source: Sharpe ratio on Wiktionary, CC BY-SA 4.0.