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How does the backtester calculate Sharpe Ratio ?

How becktester calculate Sharpe Ratio ?
Like this

Annualized Excessive Risk Free Return /Annualized StDev( Excessive Risk Free Return)

or different way?

2 responses

What I got from there:

def sharpe_ratio(algorithm_volatility, algorithm_return, treasury_return):  
        algorithm_volatility (float): Algorithm volatility.  
        algorithm_return (float): Algorithm return percentage.  
        treasury_return (float): Treasury return percentage.  
        float. The Sharpe ratio.  
    if zp_math.tolerant_equals(algorithm_volatility, 0):  
        return np.nan

    return (algorithm_return - treasury_return) / algorithm_volatility  

In numerator actually we have Excessive over US.Treasury Return not Excessive over Risk Free Return.
In Denominator I suppose that algorithm_volatility is just StDev(Return)
not StDev (Excessive over Risk Free Return)
Nether numerator Nether Denominator calculated correctly.
This is not Sharpe Ratio.