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Alpha shows how well (or badly) a stock has performed in comparison to a benchmark index. Beta indicates how volatile a stock's price has been in comparison to the...
Key Points. Understanding the alpha and beta concepts is important for maximizing portfolio performance. Higher alpha is always preferred to lower alpha, but there are scenarios where investors...
Alpha and beta are two different parts of an equation used to explain the performance of stocks and investment funds. Beta is a measure of volatility relative to a benchmark, such as the S&P 500.
Alpha refers to excess returns earned on an investment above the benchmark return when adjusted for risk. Active portfolio managers seek to generate alpha in diversified portfolios, with...
Alpha is sometimes casually referred to as a measure of outperformance, meaning the alpha is the difference between what an asset returned and what its benchmark returned. For example, if a...
Alpha is the return on an investment that’s incrementally more than a benchmark index such as the S&P 500 or another appropriate benchmark. Alpha is used as a yardstick when an investor chooses...
Alpha measures an investment's return relative to a benchmark, while beta measures risk. Find out how these two metrics can help you pick investments that match your risk/return...
To find high Alpha stocks, use a stock screener to filter for stocks that have outperformed the S&P 500 index over the past 12 months. Alpha measures asset price performance vs. the underlying index, so finding these stocks is easy using Stock Rover.
A high alpha signifies a manager’s ability to generate extra returns without a corresponding increase in risk. Moreover, alpha is crucial in assessing whether the typically higher costs of active management are warranted.
Alpha represents how much an investment’s actual return exceeded its expected return, based on its risk level. Alpha is used to evaluate whether an investment outperformed a certain benchmark....