Jensen's Alpha Calculator
Calculate Jensen alpha: excess return over CAPM expected return. Alpha = Portfolio return - (Rf + Beta x (Rm - Rf)).
Use the Jensen's Alpha Calculator
Enter portfolio return, risk-free rate, beta, and market return (all in %). Jensen alpha and CAPM expected return are calculated.
Inputs
Portfolio return, risk-free rate, beta, market return. All in %.
Results
Jensen alpha (%)
2.6%
Expected return (CAPM) (%)
11.4%
Alpha = Portfolio return - (Rf + Beta x (Rm - Rf)). Excess return over CAPM expected.
How this calculator works
Expected return = Rf + Beta x (Rm - Rf). Alpha = Portfolio return - Expected return.
How to interpret your results
Positive alpha indicates outperformance after adjusting for market risk; negative alpha indicates underperformance.
FAQs
What is Jensen alpha?▾
Excess return over the return predicted by the CAPM. Positive alpha means the portfolio beat its risk-adjusted benchmark.
Which inputs do I need?▾
Portfolio return (%), risk-free rate (%), beta, and market return (%). All typically annualised.
When would I use this?▾
To evaluate fund or manager performance relative to systematic risk (beta).
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