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The Sharpe ratio is the ratio of the excess return of an asset divided by the asset's standard deviation of returns. The Sharpe ratio has the form:

`(Mean - Riskless) / Sigma`

Here `Mean` is the mean of asset returns, `Riskless` is
the return of a riskless asset, and `Sigma` is the
standard deviation of asset returns. A higher Sharpe ratio is better
than a lower Sharpe ratio. A negative Sharpe ratio indicates "anti-skill"
since the performance of the riskless asset is superior. For more
information, see `sharpe`.

To compute the Sharpe ratio, the mean return of the cash asset is used as the return for the riskless asset. Thus, given asset return data and the riskless asset return, the Sharpe ratio is calculated with

```
load FundMarketCash
Returns = tick2ret(TestData);
Riskless = mean(Returns(:,3))
Sharpe = sharpe(Returns, Riskless)
```

which gives the following result:

Riskless = 0.0017 Sharpe = 0.0886 0.0315 0

The Sharpe ratio of the example fund is significantly higher
than the Sharpe ratio of the market. As will be demonstrated with `portalpha`,
this translates into a strong risk-adjusted return. Since the `Cash` asset
is the same as `Riskless`, it makes sense that its
Sharpe ratio is 0. The Sharpe ratio was calculated with the mean of
cash returns. It can also be calculated with the cash return series
as input for the riskless asset

Sharpe = sharpe(Returns, Returns(:,3))

which gives the following result:

Sharpe = 0.0886 0.0315 0

When using the `Portfolio` object, you can use the `estimateMaxSharpeRatio` method
to estimate an efficient portfolio that maximizes the Sharpe ratio.
For more information, see Efficient Portfolio that Maximizes Sharpe Ratio.

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