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FinanceTreynor Ratio
By Sitraka Forler · Lecturer, Durham Business SchoolUpdated 13 September 2026 About this site
Excess return per unit of market (systematic) risk.
Treynor divides excess return by beta rather than total volatility, so it rewards return per unit of non-diversifiable risk. It is most meaningful for a well-diversified portfolio where idiosyncratic risk is already gone.
Formula / theory
Treynor = (R_p − R_f) / β_p