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Alpha Calculator

Measure the return a portfolio earned above what CAPM predicted for its risk.

Risk-Adjusted Skill

Return beyond what the market exposure explains

CAPM Baseline

Compares actual return to the CAPM-expected return

Outperformance Check

Instantly see if the portfolio beat its risk-adjusted bar

Jensen's Alpha
Compare a portfolio's actual return to the return CAPM expected for its risk — the excess is alpha.
%

The actual return achieved over the period.

Sensitivity to the market (from the CAPM calculator).

%
%

The benchmark's return over the same period.

How Alpha Works

The Formula

α = Rₚ − [R_f + β × (R_m − R_f)]

Rₚ is the portfolio return. The bracket is the CAPM expected return for the portfolio's beta. Whatever is left over — positive or negative — is alpha: the return not explained by market exposure.

Alpha vs Beta

Beta is cheap — an index fund delivers market exposure for a few basis points. Alpha is what active managers charge for, and it is hard to sustain. Always check whether reported alpha survives fees, and whether it persists over a long track record.

Full Portfolio Analytics

Want deeper insights?

ARIA estimates beta, alpha, and risk-adjusted return across your whole portfolio — so you can see whether your holdings are genuinely adding value or just taking on market risk.

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CAPM Calculator
The expected-return baseline that alpha is measured against.
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Measure how two assets move together.
Correlation Calculator
Standardised co-movement between assets.
Investment Calculator
Project long-term investment growth with contributions.
ROI Calculator
Measure return on investment and annualised growth.

Frequently Asked Questions