Jensen’s Alpha Calculator is a sophisticated financial tool designed to evaluate investment and portfolio performance relative to market benchmarks, accounting for systematic risk. This essential metric helps investment professionals determine whether their portfolios are generating excess returns compared to what would be predicted by the Capital Asset Pricing Model (CAPM). By inputting your portfolio returns, risk-free rate, and market returns, you can quickly assess if your investment strategy is delivering alpha – the measure of excess return on an investment relative to its benchmark’s performance. Financial analysts, portfolio managers, and investment professionals use Jensen’s Alpha to make data-driven decisions and demonstrate their portfolio management skills to clients. The calculator provides accurate, risk-adjusted performance measurements that are crucial for modern portfolio management and investment analysis. Start using our Jensen’s Alpha Calculator today to evaluate your investment performance and make more informed portfolio management decisions.
The Jensen’s Alpha Calculator lets you check if your portfolio beat its risk-adjusted benchmark. Enter your investment return, market return, risk-free rate and beta; the tool instantly shows alpha. Example: a 9.75 % return vs 6.20 % market with 0.95 beta produces a 3.77 % alpha. Only 27 % of U.S. equity funds have positive alpha over the past 10 years (Morningstar, 2023).
