Unknown Indicator
Jensen Alpha In A Nutshell
Let us use this in an example. You are searching funds and find two that are the same return and other stats. Using the Jensen Alpha, you may be able to see which one is taking on less risk to obtain those returns compared to the other that may be using more risk to generate those returns. That means one may have greater volatility and many investor attempt to eliminate that aspect of the portfolio.
Alpha is the measure of return for a given equity, portfolio, or investment. This data point is what we want to maximize without increasing factors such as risk or cost. Jensen Alpha measures return but takes into account a risk-adjusted aspect of the alpha. Using this alpha will also utilize CAPM and take into account the product or portfolio beta number. Beta is the correlation to the underlying market and how it reacts, with a 1 being a lock step with the underlying.
Closer Look at Jensen Alpha
Everybody looks at returns and the factors that go into them individually, but we all are searching for the same. Less risk for greater returns. Jensen Alpha helps to take into account the risk aspect but that doesn’t mean it is the stopping point, but merely a directional indicator. Look at fundamentals and historical performance to gain a better understand and what you can expect going forward.
Other Indicators
All Technical Analysis
Trending Themes
If you are a self-driven investor, you will appreciate our idea-generating investing themes. Our themes help you align your investments inspirations with your core values and are essential building blocks of your portfolios. A typical investing theme is an unweighted collection of up to 20 funds, stocks, ETFs, or cryptocurrencies that are programmatically selected from a pull of equities with common characteristics such as industry and growth potential, volatility, or market segment.Cash Cows Invested a lot of shares | ||
Chemicals Invested over 40 shares | ||
Banking Invested over 50 shares | ||
Artificial Intelligence Invested few shares | ||
Dividend Beast Invested over 70 shares | ||
Power Assets Invested over 200 shares | ||
Driverless Cars Invested over 200 shares | ||
Momentum Invested over 70 shares | ||
Automobiles and Trucks Invested over 70 shares | ||
Other Complementary Tools
Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
Equity Valuation Check real value of public entities based on technical and fundamental data | |
Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
Global Correlations Find global opportunities by holding instruments from different markets | |
Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance |