PORTFOLIO RISK
Information Ratio
Measures active return per unit of benchmark-relative risk.
Formula
IR = Active return / Tracking error
Variables: Portfolio return minus benchmark; tracking error
What it means
Measures active return per unit of benchmark-relative risk.
Example
2% annual active return with 4% tracking error gives IR 0.5.
How to interpret it
This concept should be read together with its market convention, measurement horizon and underlying instrument. BondStats presents it as an analytical reference rather than investment advice; instrument documentation and primary market rules remain authoritative.
Related Formulas
BondStats reference content is independently written. Mathematical relationships, abbreviations and market conventions are presented for educational and analytical use.