Alpha Calculator (Jensen's Alpha)

Calculate the excess return of an investment relative to the return predicted by the Capital Asset Pricing Model (CAPM).

Input Parameters

Portfolio Realized Return (%)

Risk-Free Rate (%)

Market Return (%)

Beta (Portfolio Risk)

Analysis Results

Jensen's Alpha0.00%Performing at Market Risk

Expected CAPM Return: 0.00%

About this calculator

Overview

Jensen's Alpha measures the difference between a portfolio's actual return and the return that was expected given its level of risk (Beta).

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Pro Tips

Positive Alpha (> 0): The manager has added value, generating returns above what the risk level predicts.
Zero Alpha: The portfolio has performed exactly as expected for its risk.
Negative Alpha (< 0): The manager has underperformed given the risk taken.