How to use this calculator
- Enter portfolio return (%), risk-free return (%), market return (%), beta.
- Choose a display currency, then select Calculate. Results also update after a brief pause while you edit.
- Read the result with the assumptions below. Export details or save a second scenario to compare your choices.
Formula and method
Alpha = portfolio return − [risk-free + beta×(market−risk-free)].
Assumptions and limitations
Matching periods and reliable beta required; model error, fees and statistical significance are not measured.
Worked example
With portfolio return (%) = 12, risk-free return (%) = 2, market return (%) = 8, beta = 1, jensen alpha is approximately 4%.
What the result means
Positive alpha means the entered return exceeds this particular benchmark.
Common questions
How should I interpret jensen alpha?
Positive alpha means the entered return exceeds this particular benchmark.
What should I check before using this result?
Matching periods and reliable beta required; model error, fees and statistical significance are not measured.
Methodology and transparency
Calculation specification reviewed on 2026-10-14. Mathematical implementation is tested against independent reference fixtures. This does not imply review by a licensed financial professional. Read the testing and precision policy.