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Jensen's Performance Index Calculator
This jensen's measure calculator will help you to measures the excess returns earned by the portfolio compared to returns suggested by the CAPM model.
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Formula to Calculate Jensen's Alpha
Jensen's Alpha is also known as the Jensen's Performance Index, is a risk-adjusted performance measure that represents the average return on a portfolio or investment. It represents by the symbol α. The Jensen's Alpha can be calculated using the following formula.
Jensen's alpha (α) = Rp - (Rf + β(Rm - Rf) )
Where,
Rp = Returns of the Portfolio
Rf = Risk-free rate
β = Stock's beta
Rm = Market return
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