# SORTINORATIO

## Description

The Sortino ratio measures the risk-adjusted return of an instrument (or portfolio) normalized by its downside deviation. This ratio is often considered a variant of the Sharpe ratio as it only considers downside risk. This is useful for investors and analysts to assess an investment's performance under undesirable volatility environments.

## Syntax

The following describes the function signature for use in Microsoft Excel's formula bar.

```excel-formula
=SORTINORATIO(returns, threshold)
```

### Input(s)

| Argument      | Description                                                                   |
| ------------- | ----------------------------------------------------------------------------- |
| **returns**   | Required. Time series or matrix of instrument returns.                        |
| **threshold** | Optional. Return threshold. If the argument is not defined, it will use zero. |

### Output(s)

Vector of Sortino ratio estimate(s).

## Example

![](https://258561627-files.gitbook.io/~/files/v0/b/gitbook-legacy-files/o/assets%2F-MK66-MGuoULhqCDXLwy%2F-MLE1xWgwOoPHs_u-okt%2F-MLEMdI8FuGd3wDtvDzD%2Fratios.gif?alt=media\&token=bb1ea8e8-046e-4281-b922-c6b2e92d8c0e)

{% file src="<https://258561627-files.gitbook.io/~/files/v0/b/gitbook-legacy-files/o/assets%2F-MK66-MGuoULhqCDXLwy%2F-MQVBycUFB0Tm8dRCgao%2F-MLEMhFMH7RCi9SNZIt_%2FRATIOS.xlsx?alt=media&token=17052bac-6bf2-4c18-9cae-d45871de3136>" %}
Example Workbook: RATIOS
{% endfile %}