How to calculate Jensen's alpha in Excel / Analyzing stock returns / Episode 9

We show how to use Excel's regression tool to estimate the Jensen's alpha for a stock. We also explain how to interpret the statistical significance of the estimate. Finally, we offer a visual interpretation of the Jensen's alpha through a plot of the Security Market Line.

Visit the page below to download the Excel template used in this tutorial:
https://www.initialreturn.com/how-to-calculate-jensens-alpha-in-excel/

If you'd like to learn more about the Jensen's alpha formula or need an online calculator, check out our detailed post:
https://www.initialreturn.com/jensens-alpha-formula-and-calculator/

0:00 Tutorial outline
0:53 Data needed to compute Jensen's alpha
3:16 Estimating Jensen's alpha through regression
5:30 Statistical significance of the Jensen's alpha estimate
7:08 Visual interpretation through the security market line

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