Alpha

26 thg 7, 2016

Alpha is a measure of the active return on an investment, the performance of that investment compared to the S&P500 index, where 0.01 = 1%

• alpha < 0: the investment has earned too little for its risk (or, was too risky for the return)
  
• alpha = 0: the investment has earned a return adequate for the risk taken
  
• alpha > 0: the investment has a return in excess of the reward for the assumed risk