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Jensen's Alpha (CAPM) Calculator

α = R_p − [R_f + β·(R_m − R_f)] — excess return vs CAPM expectation.

Compute Jensen's alpha — a portfolio's risk-adjusted excess return relative to the Capital Asset Pricing Model: α = R_p − [R_f + β · (R_m − R_f)]. Positive α suggests the manager outperformed the CAPM expectation given the systematic risk taken; negative α indicates underperformance.

Nadia Almasri By Nadia Almasri
Published Last reviewed 1 min read

Inputs

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Results

Enter values and click Calculate to see results.
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How to use this calculator

  1. Fill in the inputs above using the units you already have.
  2. Values update automatically as you type — no submit button needed.
  3. Hover any result row for the underlying formula and intermediate values.

Formula

α = R_p − [R_f + β · (R_m − R_f)].

In depth

Compute Jensen's alpha — a portfolio's risk-adjusted excess return relative to the Capital Asset Pricing Model: α = R_p − [R_f + β · (R_m − R_f)]. Positive α suggests the manager outperformed the CAPM expectation given the systematic risk taken; negative α indicates underperformance.