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Alpha Calculator
Measure the return a portfolio earned above what CAPM predicted for its risk.
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?
This free tool measures the alpha of a single fund from returns you paste in. ARIA estimates alpha, beta, and risk-adjusted return live across your whole portfolio — showing whether your holdings genuinely add value or just take on market risk, not one series at a time.
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