SphinxRisk

Information ratio

Excess return per unit of the risk taken to get it.

How it is computed here

Your return minus the index's, divided by the tracking error.

Worked example

This one compares the portfolio with an index you choose, and the demo portfolio has none set — so there is no honest example to show here. On your own portfolio, choose a benchmark on the dashboard and it appears.

Where it misleads

It rewards consistency rather than size: beating the index by ten points one year and losing by nine the next scores terribly, and should.

Against a benchmark