Verizon Communications Jensen Alpha
| VZ Stock | | | USD 47.34 -0.23 -0.48% |
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 Verizon Communications's current Jensen Alpha with peer comparisons and related risk metrics.
Current Jensen Alpha Value
At 0.2994, Verizon Communications's Jensen Alpha indicates positive alpha — return above what market exposure alone would predict. Verizon Communications has generated modest excess return beyond what its systematic risk exposure explains.
Jensen Alpha | = | ER[a] - RFR * (1-BETA) | - | BETA * ER[b]) |
| = | 0.2994 | |
| ER[a] | = | Expected return on investing in Verizon Communications |
| ER[b] | = | Expected return on market index or selected benchmark |
| BETA | = | Beta coefficient between Verizon Communications and the market |
| RFR | = | Risk Free Rate of return. Typically T-Bill Rate |
Jensen Alpha Peers Comparison
Verizon Communications's Jensen Alpha of 0.2994 falls above the 0.0 peer average. Values range from -0.1394 (Spotify Technology SA) to 0.3398 (America Movil SAB), with tight clustering across the group. Verizon Communications 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 Verizon Communications 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.
Verizon Communications's Maximum Drawdown of
14.02 runs about
46.82 times its Jensen Alpha of
0.30 . This indicates Maximum Drawdown substantially exceeds Jensen Alpha for Verizon Communications.
Methodology, Assumptions & Data Sources
Verizon Communications has a current Jensen Alpha reading of 0.2994. Jensen Alpha for Verizon Communications is derived by applying a defined formula to historical price observations, producing a time-series of comparable readings. Price data is sourced from standardized end-of-day feeds across supported exchanges, normalized for corporate actions. Verizon Communications operates in the communication services sector, which may exhibit distinct volatility and momentum characteristics relative to the broader market. Indicator accuracy depends on data continuity across the calculation period. Gaps in trading history may affect the output.
Other Technical Indicators