Capital Southwest Jensen Alpha
| CSWC Stock | | | USD 23.88 -0.11 -0.46% |
Jensen Alpha measures the return attributable to active skill rather than passive market exposure. It is the residual return after subtracting the risk-free rate and the beta-adjusted market premium — the return the asset should have earned based solely on its systematic risk. Below is Capital Southwest's current Jensen Alpha with peer comparisons and related risk metrics.
Current Jensen Alpha Value
The current Jensen Alpha of 0.0863 places Capital Southwest at positive alpha — return above what market exposure alone would predict. Capital Southwest has generated modest excess return beyond what its systematic risk exposure explains.
Jensen Alpha | = | ER[a] - RFR * (1-BETA) | - | BETA * ER[b]) |
| = | 0.0863 | |
| ER[a] | = | Expected return on investing in Capital Southwest |
| ER[b] | = | Expected return on market index or selected benchmark |
| BETA | = | Beta coefficient between Capital Southwest and the market |
| RFR | = | Risk Free Rate of return. Typically T-Bill Rate |
Jensen Alpha Peers Comparison
Capital Southwest falls above the 0.02 peer average for Jensen Alpha. Gladstone Investment leads at 0.3015 while Sixth Street Specialty registers the lowest at -0.1774. Capital Southwest has generated more excess return relative to its market exposure than the peer group average.
Jensen Alpha Relative To Other Indicators
The chart below plots Jensen Alpha against Maximum Drawdown for Capital Southwest and its peers. Each point represents one equity — position along the horizontal axis shows Jensen Alpha while the vertical axis shows Maximum Drawdown. Equities that cluster in different quadrants carry distinct risk-return profiles. Use the dropdowns to swap in other indicators for either axis.
With Jensen Alpha at
0.09 and Maximum Drawdown at
5.98 , Capital Southwest shows a
69.24 -to-one ratio between these indicators. This indicates Maximum Drawdown substantially exceeds Jensen Alpha for Capital Southwest.
Methodology, Assumptions & Data Sources
The current Jensen Alpha for Capital Southwest is 0.0863. Capital Southwest's Jensen Alpha is computed from historical closing prices over the selected time horizon, applying the indicator's defined mathematical transformation to raw price data. Price data is sourced from standardized end-of-day feeds across supported exchanges, normalized for corporate actions. Capital Southwest operates in the financial services sector, which may exhibit distinct volatility and momentum characteristics relative to the broader market. Values are specific to the selected time horizon and may differ across measurement periods. This indicator does not constitute investment advice.
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