Alpha definition

Alpha is a measurement of the performance of an investment portfolio against a benchmark. The alpha is the return the fund or portfolio makes, relative to the return of the benchmark.

Alpha definition

Alpha is a measurement of the performance of an investment portfolio against a benchmark. The alpha is the return the fund or portfolio makes, relative to the return of the benchmark.

The benchmark is most often a stock market index. Alpha is therefore also the return on an investment that can’t be attributed to the general movement of the underlying market, and is sometimes attributed to the fund manager.

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