Alpha Calculator

Alpha Calculator

This Alpha Calculator will compute the value of alpha based on the Capital Asset Pricing Model. This CAPM-based approach will take the portfolio return, risk-free rate, beta, and market return, and calculate alpha from these elements:

Here is a snippet of the alpha calculator template:

Alpha Calculator


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Alpha Calculator

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Capital Assets Pricing Model (CAPM)

The CAPM formula is expressed as follows:

r = Rf + beta (RmRf) + Alpha



Alpha= R – Rf – beta (Rm-Rf)



R represents the portfolio return

Rf represents the risk-free rate of return

Beta represents the systemic risk of a portfolio

Rm represents the market return


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