Outperformed Risk
Based on CAPM
Your Performance
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The Alpha Calculator (Jensen's Alpha) helps you make informed decisions by calculating alpha (jensen's alpha)-related values. Measure an investment's risk-adjusted performance relative to a benchmark.
Step-by-Step Instructions
Enter your investment amounts, expected returns, and time horizons in the input fields.
Review the calculated results displayed in real-time.
Compare different scenarios using the comparison view.
Apply the insights to your financial decisions.
When you want to determine if an investment portfolio's performance exceeds what would be expected given its risk and the market's performance.
- •Portfolio Managers
- •Financial Analysts
- •Investors
Scenario
A portfolio manager claims to have outperformed the market. The portfolio's beta is 1.2, its expected return was 15%, and the market return was 10% with a risk-free rate of 3%.
Outcome
The Alpha calculator shows the portfolio generated an alpha of 5.6%, indicating it outperformed the benchmark on a risk-adjusted basis.
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