calculate_treynor_ratio

Does the description disclose side effects, auth requirements, rate limits, or destructive behavior?

With no annotations, the description carries the full burden but only gives the formula and definition. It does not disclose behavioral traits such as assumptions (e.g., same period for returns), handling of negative beta, or required data consistency (e.g., annualized vs. periodic rates).

Agents need to know what a tool does to the world before calling it. Descriptions should go beyond structured annotations to explain consequences.

Is the description appropriately sized, front-loaded, and free of redundancy?

The description is extremely concise with two sentences. The formula is front-loaded, and every word is necessary. No redundancy.

Shorter descriptions cost fewer tokens and are easier for agents to parse. Every sentence should earn its place.

Given the tool's complexity, does the description cover enough for an agent to succeed on first attempt?

Given the simplicity of the tool and presence of an output schema, the description is minimally adequate. However, it lacks usage context and parameter details that are not covered by the schema or annotations, making it incomplete for an agent to confidently invoke.

Complex tools with many parameters or behaviors need more documentation. Simple tools need less. This dimension scales expectations accordingly.

Does the description clarify parameter syntax, constraints, interactions, or defaults beyond what the schema provides?

Schema coverage is 0%, so the description should clarify parameters. It mentions the formula but does not explain units (e.g., decimal vs. percentage) or input constraints. Parameter names are self-explanatory, but additional context would improve usability.

Input schemas describe structure but not intent. Descriptions should explain non-obvious parameter relationships and valid value ranges.

Does the description clearly state what the tool does and how it differs from similar tools?

The description clearly states the tool calculates the Treynor Ratio with the formula and explains what it measures (excess return per unit of systematic risk). It is specific and unambiguous, though it does not explicitly contrast with siblings like Sharpe or Sortino ratios.

Agents choose between tools based on descriptions. A clear purpose with a specific verb and resource helps agents select the right tool.

Does the description explain when to use this tool, when not to, or what alternatives exist?

No guidance is provided on when to use this tool versus alternatives such as Sharpe ratio or Sortino ratio. The description lacks context on the appropriate scenario for Treynor ratio (e.g., well-diversified portfolios).

Agents often have multiple tools that could apply. Explicit usage guidance like "use X instead of Y when Z" prevents misuse.