Alpha measures a manager's skill in adding value to a portfolio beyond market gains. Beta assesses how a stock or fund's volatility compares to the market average. High alpha and low beta indicate ...

The frequency of alpha brain waves can be used as a measure of an individual's vulnerability to developing and experiencing pain, researchers at the University of Birmingham in the UK and ...

What is alpha in investing? Alpha measures the return on an investment above what would be expected based on its level of risk. It’s also sometimes used as a simple measure of whether an asset ...

Investopedia / Jiaqi Zhou Jensen's alpha is a measure used in finance to evaluate the performance of an investment portfolio relative to a benchmark index. It calculates the excess return ...

Alpha measures an investment’s performance compared to a relevant market, like the Dow Jones or S&P 500. Here’s how alpha is measured and how it’s used in investing. Alpha measures how an ...

Shows why it’s superior to other measures in predictive ability, comprehension, and ease of use. Discusses the comparative drawbacks of Jensen’s alpha, the Sharpe ratio, the information ratio ...

Jensen’s alpha, also referred to as ex-post alpha, essentially measures how much extra a portfolio has earned above the return predicted by the capital asset pricing model (CAPM). This ratio was ...

The formula for alpha is expressed as follows: Where: Alpha measures risk premiums in terms of beta (β); therefore, it is assumed that the portfolio being evaluated is well diversified.

Performance measures must align with portfolio use and features. Avoid Sharpe and similar ratios due to flaws; consider alternatives like trimmed alpha, median returns, and value at risk.

Alpha measures if a manager's skill, not luck, adds investment value beyond market returns. Understanding alpha helps investors avoid paying for market risk (beta) that can be managed independently.

Alpha measures an investment's return (aka performance) relative to a benchmark, while beta measures an investment's volatility compared to the overall market. Together, these statistical ...