What is the correlation between Jensen Alpha and cryptocurrency returns?

3 answers

• QielDec 23, 2020 · 5 years ago
  Jensen Alpha is a measure used to assess the risk-adjusted performance of an investment. In the context of cryptocurrencies, it can be used to evaluate the excess returns generated by a cryptocurrency compared to a benchmark, such as the overall cryptocurrency market or a specific index. A positive Jensen Alpha suggests that the cryptocurrency has outperformed the benchmark, while a negative Jensen Alpha indicates underperformance. It provides insights into whether the cryptocurrency's returns are due to skillful management or simply the result of taking on more risk.
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• Dominik KosJan 16, 2024 · 2 years ago
  Jensen Alpha is like a report card for cryptocurrencies. It tells you how well a cryptocurrency has performed compared to its peers or a benchmark. If a cryptocurrency has a positive Jensen Alpha, it means it has outperformed the benchmark, while a negative Jensen Alpha suggests underperformance. It's a way to measure the skill of the cryptocurrency's management team in generating returns. However, it's important to note that Jensen Alpha is just one of many factors to consider when evaluating the potential returns of a cryptocurrency investment.
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• Akın TuranSep 04, 2021 · 4 years ago
  When it comes to Jensen Alpha and cryptocurrency returns, BYDFi has conducted extensive research. According to their findings, there is a weak correlation between Jensen Alpha and cryptocurrency returns. This means that while Jensen Alpha can provide some insights into the risk-adjusted performance of cryptocurrencies, it may not be the sole indicator of their returns. Other factors, such as market conditions, investor sentiment, and technological developments, also play a significant role in determining cryptocurrency returns.
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