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Fundamental
Alpha
Excess return vs a risk-adjusted benchmark
Definition
Alpha represents the excess return generated by an investment or portfolio manager above what would be expected given the risk taken (as measured by beta). Positive alpha indicates outperformance, while negative alpha indicates underperformance. Alpha is calculated using regression analysis against a benchmark.
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#return
#risk-adjusted
#benchmark
#regression
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Related Terms
Category: Fundamental
Fundamental analysis examines a company's financial health, management quality, and market position to determine intrinsic value.
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