[Verse 1] When measuring portfolios, there's more than meets the eye Returns alone won't tell us if our manager's truly fly We need to weigh the danger, the systematic threat Two brilliant minds created tools we haven't forgotten yet [Chorus] Treynor divides excess return by beta's might Reward per unit of market risk burning bright Jensen's alpha whispers secrets from CAPM's core Actual minus expected, what were you hoping for? T-R-E-Y-N-O-R measures systematic reward Alpha spells the difference your portfolio scored [Verse 2] Jack Treynor knew that beta captures market's sway How much your fund will wobble when the market's led astray Take your return above the risk-free government rate Divide by beta's number, let the ratio calculate [Chorus] Treynor divides excess return by beta's might Reward per unit of market risk burning bright Jensen's alpha whispers secrets from CAPM's core Actual minus expected, what were you hoping for? T-R-E-Y-N-O-R measures systematic reward Alpha spells the difference your portfolio scored [Bridge] Michael Jensen built upon the capital asset dream If CAPM predicts your return's regime But you delivered something more or something less Alpha quantifies your manager's success or mess [Verse 3] Both metrics slice through noise to find the truth inside Did skill or luck determine how your money multiplied? Treynor asks per beta point, what premium did you earn? Jensen asks did you beat what theory said you'd return? [Chorus] Treynor divides excess return by beta's might Reward per unit of market risk burning bright Jensen's alpha whispers secrets from CAPM's core Actual minus expected, what were you hoping for? T-R-E-Y-N-O-R measures systematic reward Alpha spells the difference your portfolio scored [Outro] Two titans of performance measurement stand guard Treynor and Jensen, making manager selection less hard
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