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Jensen's Alpha Calculator
Result
Chart
Show formula & working
α = Rp − [Rf + β × (Rm − Rf)]
Details
Risk-free rate reference: 91-day Treasury Bill yield: rates and rules as of 28-Oct-2026 · Source: Reserve Bank of India — 91-day T-Bill cut-off yield at the last auction (RBI website, checked 31 Oct 2026). Every figure based on it stays editable.
How this works
CAPM says what return a portfolio should earn for its beta. Jensen's alpha is the difference between what it actually earned and that prediction.
Positive alpha means the portfolio did better than its market risk alone would explain — over that period.
Frequently asked questions
Summary or series?
If you know the annual return and volatility (or beta), use summary figures. With monthly or yearly returns, the calculator works them out — annualised by the simple method (mean × periods a year, volatility × √periods).
Does positive alpha mean it will continue?
No. Alpha describes the past period only.