Jensen's alpha is a measure used in finance to evaluate the performance of an investment portfolio relative to a benchmark index. It calculates the excess return generated by the portfolio over the expected return, which is predicted by thecapital asset pricing model (CAPM). This metric is als...
Jensen's Alpha:Jensen's Alphais similar to traditional alpha but is calculated using a different method. It measures the excess return of an investment relative to its expected return based on its beta and the risk-free rate. Jensen's Alpha is used to assess whether a portfolio manager has ...