(AI)

To quickly calculate a weighted Sharpe ratio in Excel, use?= (SUMPRODUCT(ReturnsRange, WeightsRange) - RiskFreeRate) / STDEV(WeightedPortfolioReturns). Calculate the weighted portfolio returns for each period first (e.g.,?=Asset1Return*Weight1 + Asset2Return*Weight2), then take the standard deviation of those, annualized by multiplying by?

?

????√

?(e.g.,?

252

252√

?for daily).?

YouTube?+3

1. Prepare Data:?Columns for each asset's periodic returns and a row for their respective portfolio weights.
2. Weighted Portfolio Returns:?Create a new column calculating the weighted return for each period:?= (Asset1Return * Weight1) + (Asset2Return * Weight2).
3. Average Portfolio Return:?In a new cell, calculate the average of the weighted portfolio returns:?=AVERAGE(WeightedPortfolioReturnsRange).
4. Standard Deviation:?Calculate the volatility of the weighted portfolio returns:?=STDEV(WeightedPortfolioReturnsRange).
5. Calculate Sharpe Ratio:?=(AveragePortfolioReturn - RiskFreeRate) / StandardDeviation.
6. Annualize (Optional):?Multiply the resulting Sharpe ratio by?
   

   252

   252√
   ?for daily data,?
   

   52

   52√
   ?for weekly, or?
   

   12

   12√
   ?for monthly data.?
   YouTube?+8

This video demonstrates how to calculate the Sharpe Ratio in Excel:

?

02:02

?

Checkmark Academy

YouTube ? Mar 22, 2025

• Tip:?Use?{Link: SUMPRODUCT https://ca.indeed.com/career-advice/career-development/how-to-calculate-weighted-average-in-excel}?for faster weighted return calculations if you have a table of returns and a corresponding table of weights.
• Formula for daily data:?=(AVERAGE(WeightedReturns)-DailyRiskFreeRate)/STDEV(WeightedReturns)*SQRT(252).?