If Alpha is positive the stock outperforms, if the value is negative means the stock underperforms. α < 0: The investment has earned too little for its risk (or, was too risky for the return) α = 0: The investment has earned a return adequate for the risk taken α > 0: The investment has a return in excess of the reward for the assumed risk
How to use Beta(β)?
β = 1: Exactly as volatile as the index β > 1: More volatile than the index β < 1 > 0: Less volatile than the index β = 0: Uncorrelated to the index β < 0: Negatively correlated to the index β > 2: Trending stock Higher the β higher risk/reward Example: If the beta is 1.1, the share price is like to move by 10% more than the index
Trading Tip
Choose a stock with Alpha greater than 0 and Beta greater than 1.9 for intraday in 5min timeframe for long positions Remember that such stocks will have high risk and high reward Shortlist stocks with Beta greater than 1.9 for next day in 5min timeframe
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Update v1.1 Added up or down arrows which indicates whether the value is increasing or decreasing compared to the previous value
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Updated position.
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Updated text alignment and text position.
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Converted from label to table view.
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Updated on 28 May 2022
Changed the visualization to Oscillator, helps to see the Historical values also.
Converted to Pinescript version 5.
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Updated on: 15 Nov 2023 Formula Update:
Refined mathematical formula for better accuracy.
Multi-Timeframe Integration:
Added data from various timeframes for in-depth analysis.
Look and Feel Enhancements:
Enhanced visual design for user-friendly experience.
@Arun_K_Bhaskar, thanks for your reply, Arun. Do you have in mind to create a screener with this alpha & beta so to check which ones fall better into the criteria for trading in? Regards
you have 3 alpha beta indicator, compared to other indicator this was nice and lite in use. but it does not give exact result as other two indicator. check and fix bug. i checked in google alpha beta value was different then indicator was showing. your other 2 indicator was giving same result as in google. check and fix error. this indicator is good in design and lite to use.
Arun_K_Bhaskar
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@AvinashTrade, The other two are screeners. The formula used are same.
AvinashTrade
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@Arun_K_Bhaskar, does it work for all sectors for options, future, equity, commodity.