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$BORSOARING Using standard deviation as a denominator in a fraction is likely to result in a grave distortion of your data, if it's financial. This idea goes against everything you learn in basic statistics and finance classes--not only does it invalidate the Sharpe and information ratios, it invalidates t-tests and Z-scores. But I have good reasons for it. 1. Most financial data is not normally distributed. 2. Measuring standard deviation relies on the distance from the arithmetic mean, and that's not a good measure for financial data. 3. Standard deviation gives too much weight to outliers. 4. Putting it in the denominator gives it far more weight than it deserves, since its persistence is relatively low. 5. These ratios can blow up if the standard deviation is very low.