Sharpe Ratio

The Sharpe ratio was developed by William Sharpe in 1966, showing how much excess return you can get for the increased volatility that you can tolerate caused by holding a risky asset.

Calculation:
S(x) = (rx-Rf)/StdDev(x)

x = investment
rx= average rate of return of x
Rf= best available rate of return of a risk-free asset (ie. Currencies)
StdDev (x) = standard deviation of rx