what is the jensen s measure 
jensen s measure is a risk adjusted performance measure that represents the average return on an investment above or below that predicted by the capital asset pricing model capm put simply it measures an investment s abnormal or excess returns compared to its estimated returns jensen s measure can used to determine returns for any asset including stocks and bonds as well as entire financial portfolios it takes into account the beta and the average market return of the portfolio or the investment formula and calculation of jensen s measureassuming the capm is correct jensen s measure is calculated using the following four variables 