The definition, visualization and demonstration of a calculation of the Jensen's alpha in Excel. We discuss the two types of performance analysis: returns-based and holdings-based. For investment and financial modeling of stocks and portfolios. We discuss the use of the =AVERAGE function for returns and =STDEV.P for standard deviation, plus =INTERCEPT for the alpha measure. https://factorpad.com/fin/glossary/jensens-alpha.html Please note, here we use the method to source Jensen's Alpha from the regression. Many times the regression outputs are a given in the problem. If inputs are given, you can isolate the alpha term from the CAPM formula: Jensen's Alpha = (Portfolio Return - Risk Free) - Portfolio Beta * (Market Return - Risk Free) Topics covered in our investment glossary: Excel tutorial, Python examples, portfolio theory, portfolio return, portfolio risk, correlation, regression, linear algebra, alpha signal, risk models, performance attribution. Glossary: https://factorpad.com/fin/glossary/index.html Innovators: https://factorpad.com/fin/innovators/index.html https://factorpad.com/