How can the Jensen Alpha formula be used to evaluate the performance of digital assets?

3 answers

• Dayana RaadfarApr 04, 2024 · a year ago
  The Jensen Alpha formula is a widely used tool in the financial industry to evaluate the performance of digital assets. It measures the excess return of an asset or portfolio compared to its expected return, taking into account the asset's exposure to systematic risk. The formula consists of two main components: the asset's actual return and the risk-free rate of return. By subtracting the risk-free rate from the asset's return and adjusting for systematic risk, the Jensen Alpha can provide insights into the asset's performance relative to its expected return.
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• marcel walterJun 14, 2022 · 3 years ago
  When using the Jensen Alpha formula to evaluate digital assets, it's important to consider the asset's beta, which represents its sensitivity to market movements. A positive Jensen Alpha indicates that the asset has outperformed its expected return, while a negative value suggests underperformance. However, it's worth noting that the Jensen Alpha formula is just one tool among many for performance evaluation, and it should be used in conjunction with other metrics and analysis techniques to get a comprehensive understanding of an asset's performance.
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• Alex ShantoDec 11, 2020 · 5 years ago
  As an expert in the digital asset industry, I can say that the Jensen Alpha formula is a valuable tool for evaluating the performance of digital assets. At BYDFi, we often use this formula to assess the performance of different cryptocurrencies and tokens listed on our platform. It helps us identify assets that have consistently outperformed their expected returns and make informed decisions when it comes to listing new assets. The Jensen Alpha formula is just one of the many ways we ensure that our users have access to high-quality digital assets with strong performance potential.
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