Sharpe and Sortino are both risk-adjusted performance ratios, but they use different measures of variability. Sharpe uses the standard deviation of excess returns. Sortino focuses on downside deviation relative to a specified target or minimum acceptable return.
Why the distinction matters
An unusually large positive return increases overall volatility, which enters the Sharpe calculation. A return above the chosen downside target does not contribute to downside deviation in the same way. A strategy with uneven but mostly positive returns can therefore look different under the two measures.
Neither ratio is automatically the better one for every purpose. Sharpe describes overall return variability; Sortino addresses a narrower question about returns falling below a target.
Compare the methodology, not just the values
The observation window, sampling interval and target-return assumption affect the result. A Sortino ratio based on very few downside observations may be unstable. Values calculated under different conventions should not be placed side by side as though they were directly comparable.
For example, changing the target from zero to a positive required return changes which observations count toward downside risk, even though the underlying strategy has not changed.
Both ratios are historical summaries unless explicitly estimated forward. Neither shows the full sequence of losses, so maximum drawdown and recovery time remain useful additional context.