Indicator Overview

The Sharpe Ratio indicator measures the risk-adjusted return by calculating the annualised excess return over a risk-free rate (fixed at 3%) divided by the standard deviation of returns, using user-selectable rolling windows (90-day, 180-day, 365-day, or 730-day). The metric is displayed on the primary axis with a dual-gradient colour scheme, red intensifying for negative values (poor risk-adjusted performance) and green intensifying for positive values (strong risk-adjusted performance), while price is overlaid on a secondary logarithmic axis in white for contextual reference.

Dual-Ticker Comparison Logic

The Ticker fields allow you to transition from absolute price analysis to relative strength analysis:

• Single Stock Analysis: If Ticker 2 is left blank, the indicator defaults to measuring Ticker 1against US Dollars. This allows you to analyse the asset's individual performance.

• Pair Trading & Ratios: Enter a symbol in both fields (e.g. NVDA vs. TSLA) to analyse the relationship between the two. The indicator automatically calculates the ratio (Ticker 1 / Ticker 2), helping you identify when one asset is becoming "expensive" or "cheap" relative to its peer, independent of broader market direction.

How To Use

High and rising Sharpe Ratio values (especially above 1.0–2.0) signal strong risk-adjusted outperformance, indicating efficient bull markets, healthy accumulation phases, and favourable reward-to-risk conditions for holding or entering positions, while low or negative values highlight periods of poor returns relative to volatility, often marking bear markets, drawdowns, or inefficient price action warranting caution or reduced exposure.