How do you use alpha in excel?

The expected rate of return of the portfolio can be calculated using the risk-free rate of return, market risk premium and beta of the portfolio as shown below….Alpha Formula Calculator.

Alpha Formula = Actual Rate of Return – Expected Rate of Return
= 0

Where can I find Jensen alpha?

The fund’s alpha is calculated as: Alpha = 15% – (3% + 1.2 x (12% – 3%)) = 15% – 13.8% = 1.2%. Given a beta of 1.2, the mutual fund is expected to be riskier than the index, and thus earn more.

How do you find the alpha and beta of a stock in Excel?

To calculate beta in Excel:

  1. Download historical security prices for the asset whose beta you want to measure.
  2. Download historical security prices for the comparison benchmark.
  3. Calculate the percent change period to period for both the asset and the benchmark.
  4. Find the variance of the benchmark using =VAR.

How do you calculate Cronbach’s alpha in excel?

How to Calculate Cronbach’s Alpha in Excel

  1. Step 1: Enter the Data. Suppose a restaurant manager wants to measure overall satisfaction among customers.
  2. Step 2: Perform a Two-Factor ANOVA Without Replication. Next, we’ll perform a two-way ANOVA without replication.
  3. Step 3: Calculate Cronbach’s Alpha.

How do you find the alpha in a linear regression?

Each dot has the benchmark’s return minus the risk-free rate as its x value and your return minus the risk-free rate as its y value. You then find the straight line that best fits all the dots, and that’s your linear regression line. Where it crosses the y axis is your alpha, and the slope of the line is your beta.

What is alpha in regression table?

Alpha, the vertical intercept, tells you how much better the fund did than CAPM predicted (or maybe more typically, a negative alpha tells you how much worse it did, probably due to high management fees). The quality of the fit is given by the statistical number r-squared.

How do you calculate Jensen ratio in Excel?

The first thing we need to do is calculate the mean of both the returns. Step 2: Once we have the data, we need to define a risk-free rate. Let’s say the risk-free rate is 1.5%….Jensen’s Alpha Calculator in Excel

  1. Rp = Returns of the Portfolio.
  2. Rf = Risk-free rate.
  3. β = Stock’s beta.
  4. Rm = Market return.

Can you do Cronbach alpha in Excel?

Interpreting the results of a Reliability analysis in Excel using XLSTAT. Cronbach’s alpha coefficient, also known as α coefficient, is used to evaluate the internal consistency (and hence reliability) of the questions asked in this test (answers to questions on the same topic that need to be correlated).

Is higher Jensen alpha better?

A positive Jensen’s alpha suggests the fund manager’s stock selection skill has delivered superior risk-adjusted returns. When comparing two funds with similar beta ratios, investors prefer the one with the higher alpha since this implies greater reward at the same level of risk.

How do I run a regression in Excel?

To run the regression, arrange your data in columns as seen below. Click on the “Data” menu, and then choose the “Data Analysis” tab. You will now see a window listing the various statistical tests that Excel can perform. Scroll down to find the regression option and click “OK”.