American Airlines Jensen Alpha

AAL -- USA Stock  

USD 33.57  0.27  0.80%

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American Airlines Group has current Jensen Alpha of 0.1652. Jensen alpha is a measure of the returns that are attributable to the managers ability to select security and time the market. In other words it is the returns remaining after deducting what would have been attributable to beta returns (which do not require skill) and the risk free rate.
American Airlines 
Jensen Alpha 
 = 
ER[a] - RFR * (1-BETA) 
BETA * ER[b]) 
 = 
0.1652
ER[a] =   Expected return on investing in American Airlines
ER[b] =   Expected return on market index or selected benchmark
BETA =   Beta coefficient between American Airlines and the market
RFR =   Risk Free Rate of return. Typically T-Bill Rate

Jensen Alpha Comparison

American Airlines Group is rated below average in jensen alpha category among related companies. It is rated fourth in maximum drawdown category among related companies reporting about  95.72  of Maximum Drawdown per Jensen Alpha. The ratio of Maximum Drawdown to Jensen Alpha for American Airlines Group is roughly  95.72 
Jensen alpha is the difference between the return of the portfolio, and what the portfolio should theoretically have earned. Any portfolio can be expected to earn the risk free rate (RF), plus the market risk premium (which is given by [Beta x (Market Portfolio Return - Risk Free Rate)]. Anything remaining over and above is alpha.
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