A Sharpe Ratio of 1 is considered good. Above 2 is considered amazing. A negative Sharpe Ratio is not considered good because that means your return is less than the risk-free investment (usually the US Treasury-bill).
However, it is quite dependent on the time frame you are measuring.
There are two pieces of time that are important.
- How long you’ve been collecting all the data for your portfolio (how long you’ve been managing your portfolio)
- What intervals you are using to count as a single data point (1d, 1w,1m,1yr)
Professionals have historical performance over the last 5 - 10 years and are measured annually. It is commonly thought that to have a Sharpe 2.0+ qualifies you to be a professional.
On EquitySim or learners don’t have more than 3 months of historical performance, and we measure it daily. Here, even achieving a Sharpe greater than 0.5 is challenging (less than 1% of our userbase can do this). Here’s a chart that we use to classify performance.
Check out this article if you want to gain a deeper dive on Sharpe:
How to Improve Sharpe Ratio