Sharpe's Risk-Adjusted Return

Risk-adjusted grades that compare five-year, risk-adjusted return, developed by Nobel Laureate William Sharpe. The fund manager is thus able to view his excess returns per unit of risk. This measure combines standard deviation and mean total return to show a risk-adjusted measure of the fund's performance. The higher this number is, the better. Note: As a rule of thumb, a Sharpe ratio of more than 1.00 is pretty good.