Enter the average realized return (%), the required rate of return (%), and the target downside deviation (%) into the Sortino Ratio Calculator. The calculator will evaluate and display the Sortino Ratio.

## Sortino Ratio Formula

The following formula is used to calculate the Sortino Ratio.

SR = (AR – RR) / TD

• Where SR is the Sortino Ratio ( )
• AR is the average realized return (%)
• RR is the required rate of return (%)
• TD is the target downside deviation (%)

## How to Calculate Sortino Ratio?

The following example problems outline how to calculate Sortino Ratio.

Example Problem #1

1. First, determine the average realized return (%).
• The average realized return (%) is calculated to be : 30.
2. Next, determine the required rate of return (%).
• The required rate of return (%) is measured to be: 20.
3. Next, determine the target downside deviation (%).
• The target downside deviation (%) is found to be: 5.
4. Finally, calculate the Sortino Ratio using the formula above:

SR = (AR – RR) / TD

The values given above are inserted into the equation below and the solution is calculated:

SR = (30 – 20) / 5  = 2.00

Example Problem #2

The variables required for this problem are provided below:

average realized return (%) = 60

required rate of return (%) = 30

target downside deviation (%) = 20