Alpha: Difference between revisions
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That portion of an investment’s return arising from specific (that is non-market) risk. It is a measure of the difference between the actual return and the expected performance arising from exposure to market risk factors. | That portion of an investment’s total return arising from specific (that is non-market) risk. | ||
It is a measure of the difference between the actual return and the expected performance arising from exposure to market risk factors. | |||
Also known as the error term. | Also known as the error term. | ||
An investment producing 'positive alpha' is one performing better than a benchmark with the same market risk. | |||
== See also == | == See also == | ||
* [[Benchmark]] | |||
* [[Beta]] | * [[Beta]] | ||
* [[Market risk]] | |||
Revision as of 13:24, 26 October 2016
That portion of an investment’s total return arising from specific (that is non-market) risk.
It is a measure of the difference between the actual return and the expected performance arising from exposure to market risk factors.
Also known as the error term.
An investment producing 'positive alpha' is one performing better than a benchmark with the same market risk.
