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Sterling Ratio Formula

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Sterling Ratio is a measure of the risk-adjusted return of an investment portfolio. Check FAQs

SR = (\frac{CAGR}{AMDD - 10}) \cdot - 1

SR - Sterling Ratio?CAGR - Compound Annual Growth Rate?AMDD - Average Maximum Drawdown?

Sterling Ratio Example

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Here is how the Sterling Ratio equation looks like with Values.

Here is how the Sterling Ratio equation looks like with Units.

Here is how the Sterling Ratio equation looks like.

10 = (\frac{150}{-5 - 10}) \cdot - 1

10 = (\frac{150}{-5 - 10}) \cdot - 1

10 = (\frac{150}{-5 - 10}) \cdot - 1

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Sterling Ratio Solution

Follow our step by step solution on how to calculate Sterling Ratio?

FIRST Step Consider the formula

SR = (\frac{CAGR}{AMDD - 10}) \cdot - 1

Next Step Substitute values of Variables

∴

SR = (\frac{150}{-5 - 10}) \cdot - 1

Next Step Prepare to Evaluate

∴

SR = (\frac{150}{-5 - 10}) \cdot - 1

LAST Step Evaluate

∴

SR = 10

Sterling Ratio Formula Elements

Variables

Sterling Ratio

Sterling Ratio is a measure of the risk-adjusted return of an investment portfolio.

Symbol: SR

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Sterling Ratio

Compound Annual Growth Rate

Compound Annual Growth Rate is a measure of the geometric progression ratio that provides a constant rate of return over a specified time period.

Symbol: CAGR

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Compound Annual Growth Rate

Average Maximum Drawdown

Average Maximum Drawdown represents the greatest potential loss or downturn over the defined period.

Symbol: AMDD

Measurement: NAUnit: Unitless

Note: Value can be positive or negative.

Formulas to find Average Maximum Drawdown

Other formulas in Risk Management category

Go Sortino Ratio

S = \frac{R p - R f}{σ d}

Go Modigliani-Modigliani Measure

M 2 = R ap - R mkt

Go Maximum Drawdown

MDD = (\frac{V trough - V peak}{V peak}) \cdot 100

Go Upside/Downside Ratio

R up/down = \frac{AI}{DI}

How to Evaluate Sterling Ratio?

Sterling Ratio evaluator uses Sterling Ratio = (Compound Annual Growth Rate/(Average Maximum Drawdown-10))*-1 to evaluate the Sterling Ratio, The Sterling Ratio quantifies investment performance by comparing periodic returns to periodic drawdowns over 3 years. Sterling Ratio is denoted by SR symbol.

How to evaluate Sterling Ratio using this online evaluator? To use this online evaluator for Sterling Ratio, enter Compound Annual Growth Rate (CAGR) & Average Maximum Drawdown (AMDD) and hit the calculate button.

FAQs on Sterling Ratio

What is the formula to find Sterling Ratio?

The formula of Sterling Ratio is expressed as Sterling Ratio = (Compound Annual Growth Rate/(Average Maximum Drawdown-10))*-1. Here is an example- 10 = (150/((-5)-10))*-1.

How to calculate Sterling Ratio?

With Compound Annual Growth Rate (CAGR) & Average Maximum Drawdown (AMDD) we can find Sterling Ratio using the formula - Sterling Ratio = (Compound Annual Growth Rate/(Average Maximum Drawdown-10))*-1.

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Sterling Ratio Formula

Sterling Ratio Example

Sterling Ratio Solution

Sterling Ratio Formula Elements

Other formulas in Risk Management category

How to Evaluate Sterling Ratio?

FAQs on Sterling Ratio

Variable Name