--- title: "Sharpe, volatility | RupeeCase Terminal" description: "Volatility is the yearly swing of weekly returns. Sharpe is return above a 6 percent risk free rate per unit of that swing. How the app computes both." source_url: "https://www.rupeecase.com/learn/terminal/sharpe-and-volatility" --- ## Watch: Sharpe, volatility Volatility is in the key figures in Basic and Advanced.Sharpe and volatility: how bumpy was the ride? 5 chapters, 0:54, with voice and music 1. [Chapter 1Where it is0:19](/instiv2/media/tut3/sharpe-and-volatility-where-phone-dark-v3-va2.mp4) 2. [Chapter 2What it means0:06](/instiv2/media/tut3/sharpe-and-volatility-meaning-phone-dark-v3-va2.mp4) 3. [Chapter 3Worked example0:06](/instiv2/media/tut3/sharpe-and-volatility-example-phone-dark-v3-va2.mp4) 4. [Chapter 4How to read it0:13](/instiv2/media/tut3/sharpe-and-volatility-reading-phone-dark-v3-va2.mp4) 5. [Chapter 5Watch out0:10](/instiv2/media/tut3/sharpe-and-volatility-watch-phone-dark-v3-va2.mp4) Screens from the RupeeCase app on sample data. Strategy figures are model, back tested, as of the date on screen. Formula and example numbers are illustrative. Mark as watched 3In this screen ## Every button the video points at. A still from each chapter with its buttons and fields numbered. Pick a number to zoom in on it; hover the still for a close up; Esc shows the whole screen again. Sample data, no order is placed. **1**Where it is**4**How to read it ### Chapter 1: Where it is 2 Show the whole screen 12 Show the whole screen 1. 1**Volatility, always shown**Volatility is in the key figures in Basic and Advanced. Shown in the video, not on this still 2. 2**Sharpe, in Advanced**Sharpe sits beside it in Advanced. Shown in the video, not on this still ### Chapter 4: How to read it 1 Show the whole screen 1 Show the whole screen 1. 1**Risk figures**The Risk tab lists both with the other risk figures. Shown in the video, not on this still ## Where it is ScreenStrategy (key figures, Risk tab)Advanced Volatility is on the cards and key figures (always in Basic). Sharpe is on cards and key figures in Advanced, and in the Risk figures card. Index in this video: [Allcap](/strategies/allcap) (strategy page). ## What it means Volatility measures how much the model's weekly returns swung around their average, scaled to a year. Sharpe divides the average weekly return above a 6 percent a year risk free rate by that swing. A higher Sharpe means more return for each unit of swing in the history. ## The formula Volatility: standard deviation of weekly returns, times the square root of 52. Sharpe: average weekly return less the weekly risk free rate, over that deviation, times the square root of 52. As computed in the RupeeCase app`Volatility = standard deviation of weekly returns x square root of 52 Sharpe = (average weekly return - 6% / 52) / standard deviation of weekly returns x square root of 52` ## Worked example Example only * Average weekly return 0.5%, weekly sd 3% * Volatility: 3% x 7.21 = 21.6% a year * Sharpe: (0.5% - 0.115%) / 3% x 7.21 = 0.92 ## How to read it * The app's tip: above 1 is good, above 2 is rare. * Compare volatility with the NIFTY 50 figure under it. * Two strategies with the same growth: the lower volatility one had the smoother path. ## Watch out * The risk free rate is fixed at 6 percent a year. * Volatility counts rises and falls alike; Sortino (Advanced) counts falls only. * Weekly data, model history: not a forecast. ## Transcript Tap Sound on for voice and music. These are the captions of the video, chapter by chapter. 1. 0:00**Where it is.** Volatility is in the key figures in Basic and Advanced. 2. 0:19**What it means.** Volatility: standard deviation of weekly returns, times the square root of 52. Sharpe: average weekly return less the weekly risk free rate, over that deviation, times the square root of 52. 3. 0:25**Worked example.** Worked example, example only: Average weekly return 0.5%, weekly sd 3%. Volatility: 3% x 7.21 = 21.6% a year. Sharpe: (0.5% - 0.115%) / 3% x 7.21 = 0.92. 4. 0:31**How to read it.** The Risk tab lists both with the other risk figures. 5. 0:44**Watch out.** Watch out: The risk free rate is fixed at 6 percent a year. Volatility counts rises and falls alike; Sortino (Advanced) counts falls only. Weekly data, model history: not a forecast. ## Terms in this tutorial * [Sharpe ratio](/learn/glossary#sharpe-ratio)Return above a risk free rate for each unit of volatility. * [volatility](/learn/glossary#volatility)How much returns fluctuate. * [standard deviation](/learn/glossary#standard-deviation)Statistical measure of dispersion. * [Sortino ratio](/learn/glossary#sortino-ratio)Like Sharpe but only penalises downside volatility. ## Learn it in depth * [Module 2.3: Risk Metrics That Matter8 min read, free](/learn/path-2/module-2-3-risk-metrics-that-matter) * [Module 4.1: Modern Portfolio Theory, What Actually Matters11 min read, free](/learn/path-4/module-4-1-modern-portfolio-theory) * [Module 16.1: Volatility: historical against implied7 min read, free](/learn/path-16/module-16-1-historical-vs-implied-volatility) TKeep watching ## Next tutorial. [0:47Next tutorial, Read a strategyNet return and charges: what do estimated costs take?Net return is the model after estimated charges. The Charges card shows before and after over the full history; cost per year is the yearly estimate.Watch next](/learn/terminal/net-return-and-charges) ### Related tutorials * [0:56Read a strategy, BasicMax drawdown: how bad did it get?0:56 video, BasicWatched](/learn/terminal/max-drawdown) * [1:08Read a strategy, AdvancedAlpha: which of the two alphas is this?1:08 video, AdvancedWatched](/learn/terminal/which-alpha) * [0:58Read a strategy, BasicThe key figures card: what are the four lead figures?0:58 video, BasicWatched](/learn/terminal/key-figures-card) [All 67 terminal tutorials](/learn/terminal/) Try it in Practice ## See it on your own screen. Practice mode runs the whole terminal without real orders, so you can open any strategy and find every screen from this tutorial for yourself. [Sign up for RupeeCase](https://invest.rupeecase.com/signup)[Glossary](/learn/glossary) Explore next ## Keep learning the terminal. * [TopicLow volatility investing reading list: the factor, the risk measures and the toolsA reading list: guides, modules, tools and questions](/topics/low-volatility-investing/) * [TutorialGrowth per year: how fast did the model grow?1:06 video, Basic](/learn/terminal/growth-per-year) * [TutorialThe riskometer: what sets Low to Very High?0:45 video, Basic](/learn/terminal/riskometer) * [TutorialMinimum investment: why does each strategy have one?0:51 video, Basic](/learn/terminal/minimum-investment) * [TutorialRebalance cadence: how often does the strategy trade?0:56 video, Basic](/learn/terminal/rebalance-cadence) * [TutorialRs 10,00,000 became: what do the hero figure and periods show?1:08 video, Basic](/learn/terminal/hero-figure-and-periods) Community ## Join my WhatsApp group. Scan the code, fillFill one short form, and join my WhatsApp group. 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